Well known TV presenter Eamonn Holmes has been defeated by HMRC at an IR35 tax tribunal. Holmes appealed against HMRC’s tax assessment concerning engagements between his limited company, Red, White and Green Limited and ITV during the 2011/12 and 2014/15 tax years. The parties are yet to agree on the exact figures owed.
Tribunal Judge Harriet Morgan concluded that there was sufficient mutuality of obligation (MOO) and “at least a sufficient framework of control to place the assumed relationship between ITV and Mr Holmes in the employment field”. This was in spite of the “considerable autonomy” that Holmes exercised when presenting ITV’s This Morning show.
Despite her ruling, Judge Morgan expressed her belief that Holmes hadn’t deliberately acted to avoid paying tax, commenting that the busy presenter had understandably left it to others to deal with the legal details of his engagements for him so that he could focus on his work. However, it seems that even these professionals were unable to correctly navigate the complexities of the IR35 rules.
This is of little comfort to Holmes, who for almost four decades has worked for a wide variety of broadcasting companies. The presenter is said to be acting with the advice of his lawyers to understand the implication of the decision and has not yet announced if he will seek appeal. As one industry spokespersons pointed out, the cruel irony of the situation is that the rules under which HMRC pursued Mr Holmes are about to be replaced.
Under the new rules, scheduled for roll out in April 2020, Holmes wouldn’t owe HMRC any money and would actually get a tax refund. It would be his deemed employer, in this case ITV, that would be liable for the tax bill. However, because of recognised flaws in the old rules, Holmes is now facing a tax bill for employment taxes that shouldn’t even be his responsibility.
Although the verdict is discouraging for other presenters awaiting a tribunal appeal, legal opinion is that Mr Holmes’ contract with ITV was quite different from the vast majority of contractor engagements. The victory should be seen in the context of HMRC losing other high profile cases against presenters Lorraine Kelly, Helen Fospero and Talksport’s Paul Hawksbee in the past year. These cases offer definitive evidence that HMRC still has difficulty interpreting its own rules.
This content has been supplied by IR35 Guru.
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