Kaye Adams
BBC Radio Scotland

HMRC plays fast and loose with IR35 rules

17th Apr 2019
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Loose Women presenter Kaye Adams has triumphed over HMRC, which demanded £124,441 in PAYE and NIC from her personal service company on the basis that IR35 applied.

This is the third in a series of cases involving presenters (following Ackroyd and Lorraine Kelly) who were accused of not complying with the IR35 rules in respect of contracts performed through their personal service companies. We understand there are further IR35 cases concerning actors and presenters which are in the tribunal pipeline.

Freelance career

Kaye Adams has worked as a freelance journalist for over 20 years, writing for various newspapers and magazines, as well as appearing on TV and radio programmes including the popular daytime show Loose Women. She has also co-authored two books and hosts numerous corporate events. Adams works through her company Atholl House Productions Ltd, which was the appellant in this case (TC07088).

The dispute concerned two contracts with the BBC to present a series of programmes on Radio Scotland in the periods 16 March 2015 to 31 March 2016, and 4 April 2016 to 31 March 2017. HMRC had also raised assessments under the IR35 rules in respect of income from contracts operated in 2013/14 and 2014/15 but effectively dropped the tax demands for the earlier years just before the tribunal hearing.


As with the Kelly and Ackroyd cases, the judge had to determine whether a hypothetical contract between Adams and the BBC had the attributes of an employment contract or if it appeared to be a contract for services (a self-employed arrangement), in which case IR35 would not apply.

The tribunal concentrated on the written contracts between the BBC and Atholl House Productions Ltd, which required the company to provide the services of Kaye Adams to present “The Kaye Adams Programme” each weekday morning on BBC Radio Scotland. The contracts specified that at least 160 programmes would be presented for a minimum fee of £155,000, and any further programmes would be paid for at a rate of £968.75 per programme. In other words, the company was paid a “piece-rate” of £968.75 per programme.   

The tribunal also heard evidence from the programme’s editor and producer, but the judge regretted that he did not hear evidence from the BBC’s legal and business affairs team responsible for dealing with the two written agreements at the centre of this case.   

Key points

The judge considered whether the following attributes of the hypothetical contract between the BBC and Adams existed:

Mutuality of obligation (MOO)

The question of whether Adams was obliged to provide her services to the BBC and if the BBC was obliged to pay her (a mutuality of obligation) centred around the issue of who had first call on Adams’ time.

Although the written contracts said the BBC had first call, and that the Adams had to obtain the BBC’s permission to enter into other engagements, the evidence given by the programme editor and producer was clear that this restriction did not exist in practice. The judge concluded that the written agreement did not reflect the actual contract performed by the parties.     


The BBC did exercise editorial control over the content of the programmes, but it did not have control over Adams’ work outside of BBC Radio Scotland. The BBC could sanction Adams retrospectively if she took actions which brought the BBC into disrepute but that did not amount to control.

Right to provide a substitute

The tribunal found that Adams did not have the right to provide a substitute under the actual agreement performed with the BBC, although there was a substitution clause in the written agreement.

In business on own account

The BBC contracts in the two years covered by this case amounted to around 50% of Adams’ income in that period, but the tribunal thought it inappropriate to view those two years in isolation in respect of her overall professional career.

Adams stressed in her evidence that it was important for her to maintain her brand, particularly as part of her role on Loose Women, as this led onto many other engagements. The tribunal concluded that Adams is indeed in business on her own account and her professional identity is far more connected with Loose Women than it is with the BBC.

Part and parcel of organisation

The written contracts gave the BBC the right to ask Adams to attend editorial training and to undertake a medical, but it never exercised those rights. The tribunal concluded that Adams was not seen as part of the BBC organisation but instead as an external services provider.

Employee obligations and benefits

The relationship between the BBC and Adams was not intended by either party to be a relationship of employer and employee. The written agreements did not give Adams any entitlement to sick pay, maternity leave or pension contributions.


The judge concluded that the hypothetical contract was one of provision of services and not an employment contract, so IR35 did not apply.

Contrast with Ackroyd  

HMRC’s evidence used the Ackroyd decision (TC06334) to support their case. However, Judge Beare made it clear in his judgment in Adams case that he was not obliged to follow Ackroyd as that was an FTT decision and thus not binding on him.

Other points which distinguish Adams’ position from Ackroyd were:

  • Ackroyd’s contract was for seven years, followed by a five-year contract, whereas Adams’ contracts were each for one year.
  • Ackroyd’s other non-BBC income was minimal, whereas Adams’ non-BBC income was around 50% of her income for the years in question. 
  • The FTT found that the BBC did have first call on Ackroyd’s time, she attended the BBC training sessions and was told who she would be interviewing. Adams’ contract with the BBC had none of those features.
  • Ackroyd was required to seek BBC consent for her non-BBC engagements, whereas Adams did not.

Replies (16)

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By Justin Bryant
17th Apr 2019 10:48

A very correct looking decision with an interesting discussion of the topical subject of quasi sham/mislabelling - which is not confined to employment/self-employment disputes per the recent case in the link below:


Thanks (1)
By johnjenkins
17th Apr 2019 10:56

Isn't it about time HMRC realised that employment status is not in their domain?

Thanks (6)
Replying to johnjenkins:
By jamiea4f
17th Apr 2019 11:25

Ah well it's probably easier than making firms like Google, Amazon etc pay what they should do in UK tax, if all their dodges were unscrambled correctly. But then that would involve a lot of work...

Thanks (7)
By Nick Graves
17th Apr 2019 11:45

I'm beginning to think that some people within HMRC are actually on our side on this and are trying to show how untenable and frankly stupid is the official line.

It's fail after fail after fail.

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By tedbuck
17th Apr 2019 12:44

More, I think, That HMRC are just not very good at their jobs.

I have to agree that the big tech firms would be a better target but I think the HMRC team need a bit more practice in getting their act together.

Thanks (2)
By Kaylee100
17th Apr 2019 13:33

If she had been a self employed sole trader, would the liability have been on the BBC?

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Replying to Kaylee100:
By johnjenkins
17th Apr 2019 14:07

No, because the decision is based on work not entity. HMRC are trying to focus on each individual contract of work rather than a generalisation of work. So it doesn't matter how many people you do work for if HMRC believe any of those pieces of work fall under IR35 they will challenge, although the judge did comment on the fact that there were other contracts amounting to 50% of her business. This should restrict HMRC just going for those that have one client.

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Replying to johnjenkins:
By EnglishRose
18th Apr 2019 07:17

Yes. Whilst I accept if I worked for one entity Monday to Friday and another on Saturday and Sunday that could mean I had 2 employments HMRC should not stop there. They need to look at the overall sole trader or limited company business and the control the person has etc etc as we all know which is why their on line tool does not always work to give the correct answer. I know these TV presenters cannot be substituted just as usually if I am paid to give a talk even a 3 day one they want me not my cousin or neighbour and no substitution allowed but that is not the end of the test and does not on its own make me or this lady employed.

Thanks (1)
Replying to Kaylee100:
By Chris.Mann
17th Apr 2019 15:04

For many, many years the BBC engaged a substantial number of "freelancers" on self-employed terms.
This arrangement was only brought to a complete close, in 2017/18.
If ever HMRC chose to investigate the BBC's engagement arrangements, it would open an extremely large can of worms.
Christa Ackroyd was merely the tip of the iceberg. In other words low hanging fruit.

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By C Graham
17th Apr 2019 15:08

the basis for proving a service provider is not an employee is pretty easy. Do you get any benefits, holiday pay, sick pay - that alone should be enough to indicate that there's no employment contract.

HMRC must look for those fundamental details first so if that doesn't exist why do they then go on to try and prove employment exists? Seems like they ignore the warning signs that they are unlikely to win a case and go on to scour and conjure up other elements that might possibly suggest 'employment'.

Do they really think contractors would put themselves in a position whereby they get none of the benefits of employment and yet risk paying the added costs of being an employee !

In any case there are statutory conditions as to eg the minimum amount of paid holiday employees are entitled to - so where HMRC is trying to show there is employment, why is it not chasing the employer first for breaching its obligations to the employee. If that was the first part of any IR35 investigation, it would put the onus on the employer to show WHY they did not provide the statutory holiday etc to the 'alleged employee' - ie that there was no recognised employment between the two parties.

HMRC is turning into the financial equivalent of a cowboy clamper.

Thanks (7)
Replying to C Graham:
By SteveHa
18th Apr 2019 07:24

Because the test is different for tax and for employment rights, which means it is very possible to be employed for tax purposes but not for employment rights purposes.

The solution is, of course, to align the tests.

Thanks (1)
Replying to SteveHa:
By johnjenkins
18th Apr 2019 08:53

No, the solution is for HMRC to keep their noses out of employment status. Mind you it didn't help matters when the EU decided there was a worker status so the self-employed could claim holiday pay etc.

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Replying to SteveHa:
By C Graham
18th Apr 2019 14:23

and therein lies the problem. Because not so much that the test differs but that HMRC ignore the findings of one in order to focus on other elements to 'prove' that a contract was employment in disguise.

I think the word disguise says it all. IR35 was a solution to a problem that didn't exist. It was a whacky idea of HMRC dreamed up overnight with the suggestion that contractors were actually employees trying to avoid NIC etc simply because they were working for a client.

Seriously how many contractors do you know that ever got any benefit of sick pay or holiday pay. I know some that were genuinely part time employees and were treated with pro rata benefits as any normal employee would. But those are not the target under IR35.

A chicken may resemble a bantam but it doesn't mean they are the same.

Either you are an employee or you are a contractor.

HMRC implies you can be both at the same time.

If a contractor cannot apply statutory employment law to their terms of service, then very simply they are not employees (ie in relation to the client who contracts) because if the law doesn't recognise their employment status or rights under UK employment legislation, why would HMRC be able to win a legal case to state that they are disguised employees.

Thanks (1)
Replying to C Graham:
By johnjenkins
18th Apr 2019 15:06

Gordon Brown decided the treasury was short of money so he started to hit CIS subbies, IT contractors and any other subcontractors. So many formed their own Limited Company. Hence IR35.
Unfortunately according to EU rules there is such a thing called a worker which comes with benefits. Workers can be self-employed. HMRC look at every contract of work to see if there is a difference between the "contract for services" and what happens in practice.
The time and cost HMRC have spent on losing cases is beyond belief. Just think MTD could've been up and running properly by now. No HMRC, you keep spending time and money on lost causes.

Thanks (1)
By EnglishRose
18th Apr 2019 07:14

It is a good decision. HMRC have been pushing the boundaries for too long. I have been a sole trader for 20 years and indeed have on occasion been paid by the BBC but no way am I anyone's employee.

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Replying to EnglishRose:
By johnjenkins
18th Apr 2019 08:55

Unfortunately where HMRC is concerned our opinion doesn't count.

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