The presenter Adrian Chiles has been spared a £1.7 million tax bill after winning a 7 year battle against HMRC.
The case could have implications for HR departments employing contractors across the country.
According to HM Revenue and Customs the BBC 5Live presenter was an employee when he worked for the BBC and ITV between 2012 and 2017.
However, Mr Chiles, who previously presented the One Show and Daybreak, argued that he was a contractor, working through his media-based company Basic Broadcasting Ltd (BBL).
Evidence pointed to a business
Judge Cannan ruled in his favour, allowing the appeal relating to services provided to the BBC and ITV between the five tax years spanning 2012 to 2017.
The tribunal’s partial analysis found that all the contracts created the initial impression of contracts of employment.
However, after considering all the circumstances and activities as a whole, they agreed that Mr Chiles was in business on his account. The evidence submitted to support that position was overwhelming, and in the end IR35 did not apply.
Dave Chaplin, CEO of tax compliance firm IR35 Shield, who attended the tribunal and has spoken to Mr Chiles, said: “The judgement unequivocally demonstrates that HMRC was entirely wrong in its assessment and failed to consider all the circumstances.
“He (Mr Chiles) is the victim of a very poorly run investigation by HMRC inspectors. Questions need to be asked as to whether additional independent oversight is needed when HMRC are running IR35 status cases.
Mr Chaplin’s firm helps HR departments and individuals defend against HMRC accusations, which he says comes down to creating a documented ‘plethora of evidence’. In this case the evidence proved Mr Chiles was not an employee
The decision includes many significant points such as:
- Hiring his own personal assistant.
- Paying an agency 15 percent of his fees to manage and develop his career.
- He carried out unpaid activities to maintain and grow his profile whilst turning down a variety of work.
- He helped create a show and was entitled to a 50 percent share of production profits together with Avalon.
- He developed and pitched his own ideas and contributed to other television programmes.
- He presented other programmes for multiple production companies.
- He wrote for several national newspapers.
- He had provided his services as a broadcaster and journalist to so many others – in the period 1996 to 2019 he contracted with nearly 100 different third parties.
- He was able to benefit from sound business management.
Chaplin concluded: ““It was also notable that the tribunal described all the witnesses as credible, and that ‘there is no suggestion that Mr Chiles set out to avoid tax by supplying his services through BBL…..The question is why all this compelling evidence that demonstrated his innocence was seemingly ignored.
An HMRC spokesperson said it would “carefully analyse the outcome of the tribunal before considering next steps”.
Feyaza Khan has been a journalist for more than 20 years in print and broadcast. Her special interests include neurodiversity in the workplace, tech, diversity, trauma and wellbeing.