IR35: Upper Tribunal Appeal Finds in Favour of HMRC

6th August, 2020
By 6. August 2020IR35, News
IR35 - Upper Tribunal Appeal Finds in Favour of HMRC

An unexpected ruling at the Upper Tribunal has seen HMRC come out on top in the case of presenter Paul Hawksbee. The Judge, Mr Justice Zacaroli, overturned the verdict of the First-Tier Tribunal (FTT), which found in Hawksbees favour back in June 2019. Hawksbee had successfully defended his contractor status after HMRC issued him with a tax bill of roughly £140,000 concerning an engagement between his limited company Kickabout Productions Limited (KPL) and radio station Talksport.

In a complex case involving many factors, but particularly the issue of mutuality of obligation (MOO), Judge Zacaroli decided that it was not expressly stated that Talksport had no obligation to provide Hawksbee with work under the two hypothetical contracts in question. He concluded: “Taking all of the relevant factors into account, we consider that viewed as a whole they are not inconsistent with the hypothetical contracts being contracts of employment.”

Judge Zacaroli also noted that there was also a sufficient framework of control, including the ultimate right to decide on the form and content of a particular episode. The defence’s argument that the fixed fee Hawksbee received per show was indicative of ‘financial risk’, and that he was not ‘part and parcel’ of Talksport, was not viewed as significant in this case.

The Upper Tier’s verdict once again highlights how complex and arbitrary employment status decisions can be. This leaves contractors in an increasingly grey area, particularly now that the reformed legislation will apply to the private sector from April 2021. The IR35 status determination tests seem increasingly inadequate or irrelevant when it comes to interpreting the many variations and nuances of modern working.

This content has been supplied by IR35 Guru

If you’ve been affected by the Off-Payroll reforms, or if you’re unsure about your employment status, ContractingWise can help you make sense of your options. For an overview of IR35 and the off-payroll changes ahead, read our free guide here. We have a range of hassle-free services that can help you re-open your limited company, or find the right umbrella company for you. To talk to a member of our team, call: 0203 642 8679

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