IR35: Another win for TV presenter
TV host Helen Fospero is the latest broadcaster to triumph over HMRC at first tier tribunal after a judge concluded that IR35 did not apply to contracts with ITV.
Helen Fospero is the ninth broadcaster to be hauled over the IR35 coals by HMRC, as listed in our IR35 casebook. There may be more undocumented cases which have not reached tribunal or which have settled without a hearing.
Fospero worked with, and acted as a substitute for Lorraine Kelly, so the circumstances of the two presenters were similar, and tellingly they were both successful at first tier tribunal.
Fospero set up her company, Canal Street Productions Ltd, in 2002 when the BBC asked her to be the anchor presenter for Look North. At that time, the BBC told her she could not be an employee and must be engaged through a personal service company.
She subsequently used Canal Street to supply her services to a range of corporate clients, including ITV.
This case was only concerned with three contracts between Canal Street and ITV Breakfast Ltd in 2012/13 and 2013/14 for providing Fospero’s services as a presenter on the programmes “Daybreak” and “Lorraine”. During those years, the ITV contracts generated up to 74% of Canal Street’s income, but the company also had 10 to 20 other customers.
The PAYE and NIC at stake in those two tax years was £80,770.96 before the calculation of interest and penalties.
As with other IR35 cases, the first tier tribunal (FTT) had to consider whether Fospero would have been regarded as an employee under a hypothetical contract between her and ITV (ITEPA 2003, s 49). The terms of that hypothetical contract must be constructed from the circumstances under which the services were provided.
In a very clear judgment, Judge Greenbank set out three essential aspects of an employment contract:
- mutuality of obligation (MOO) to offer and accept work
- control by the engager (in this case ITV) over the worker
- lack of significant indicators of self-employment
The FTT found that there was no mutuality between the specific engagements. ITV was not required to provide work outside of those engagements and Fospero was not required to accept work that was offered by ITV. The judge concluded that there was insufficient MOO to establish a contract of employment in this case.
Judge Greenbank was clear that the relevant type of control for this purpose was contractual control.
ITV operated editorial control over the content of the programmes. However, ITV did not control where, when and how Fospero prepared to present those programmes or the words she actually used in the broadcasts. The control which ITV had over Fospero was the same as it applied to any other presenter, whether an employee or not, so it was not indicative of an employment relationship.
There were a number of indicative factors which pointed towards Fospero being self-employed:
- She provided her own laptop and earpiece
- She had no office or fixed place of work at ITV
- She was not provided with an ITV email address
- She did not receive an expense allowance from ITV
- Canal Street traded before and after the contracts with ITV
- Canal Street hired an agent to seek other work for Fospero
There was little risk that Canal Street’s invoices would not be paid by ITV. However, Canal Street would not be paid if Fospero was absent due to sickness, holiday or maternity.
The contracts with ITV did not include a right of substitution, as each contract was only to provide the services of Fospero. If Fospero could not perform a particular engagement, it was ITV’s responsibility to find a substitute, not Canal Street’s.
This lack of substitution did not prevent the judge from concluding that Fospero should be regarded as self-employed and not an employee even if she had been engaged directly by ITV. IR35 did not apply to the contracts in question.