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Loose Women Presenter Avoids Paying Employee Taxes

on Friday, 03 May 2019.

In Atholl House Productions Limited v HMRC, it was found that Loose Women presenter Kaye Adams, who had provided services to the BBC through a service company, was not an employee of the BBC for tax purposes.


Ms Adams provided services for the BBC and other media organisations through her personal service company, Atholl House Productions Limited. During the tax years 2015/16 and 2016/17, Ms Adams had presented a programme on BBC Radio Scotland which was governed by two written agreements between the BBC and Atholl House Productions Limited.

On investigation, HMRC decided that for these tax years, Ms Adams' arrangements with the BBC fell within the scope of the anti-avoidance tax legislation known as IR35. IR35 provides that where someone offers services through an intermediary such as a personal service company, but in practice operates more like an employee than a self-employed person, they can be treated as an employee for tax purposes. On this basis, HMRC decided that Atholl House Productions Limited was liable to pay income tax and national insurance contributions for those tax years.

Atholl House Productions Limited appealed HMRC's decision.

First-Tier Tribunal's Decision

The Tribunal considered what were the actual legal obligations for both BBC and Atholl House Productions Limited, and emphasised the importance of considering the overall picture of Ms Adams' engagement with the BBC.

It was acknowledged that there was a mutuality of obligation between the BBC and Ms Adams, in that the BBC would be obliged to pay Ms Adams a fee if it failed to offer her a minimum amount of work in the contract term, and in that (despite there being an express contractual right to appoint a substitute), in reality Ms Adams was obliged to provide the services herself and had no genuine ability to substitute another presenter in her place. This indicates that Ms Adams might have been properly treated as an employee of the BBC.

However the Tribunal also concluded that, notwithstanding the terms of the written agreements, whilst the BBC did have ultimate editorial control over the content of her BBC programmes, crucially, it did not have any control over Ms Adams' other engagements, nor the right of first call over her services. Other factors indicating that Ms Adams was not an employee were that she had no entitlement to use BBC equipment or access to BBC systems from home, no entitlement to holiday pay, sick pay, maternity leave or pension contributions and that the BBC's formal reviews, processes and benefits which applied to their employees did not apply to Ms Adams.

The Tribunal also found it significant that Ms Adams has been a freelance journalist for over 20 years, during which time she has had a continuous series of engagements with various media organisations, some of which engagements were concurrent with her engagement by the BBC over the two tax years of assessment in question.

On this basis, the Tribunal found that a hypothetical contract between Ms Adams and the BBC would be one for services, not an employment contract, and there was no relationship of employer and employee between them.

Best Practice

Organisations who receive services from individuals via intermediaries such as personal service companies need to be aware of the factors in determining whether such an individual should be treated as an employee for tax purposes and be aware that this will be assessed on a Tribunal's views of the realities of the working relationships, not just the express terms of a contract.

In the public sector, it is already the case that the responsibility for making this determination lies with the end hirer, rather than the personal service company and individual concerned.

In the private sector, it is still the personal service company, acting through the relevant individual, who has the responsibility for determining the individual's employment status. However this will change in April 2020, from which point the responsibility will lie with the end hirer in both the public and the private sector.

It is therefore critical to understand the relevant factors in order to identify those who should be treated as employees for tax purposes, and to ensure that those who wish to be taxed as self-employed persons are not treated in practice more like employees.

For more information, please contact Bob Fahy in our Employment Law team on 01923 919 302, or complete the form below.


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