Media presenter Kaye Adams has finally won her IR35 case against HMRC after a nine-year ordeal. The First-tier Tribunal has upheld Ms Adams’s appeal for the third time, confirming her self-employed status for the tax years 2013/14 to 2016/17.
On top of battling in court, the vibrant and fearless presenter has been keeping work ticking over. Have a listen to one of Kaye’s latest episodes on her podcast which we include below.
Key points of the case provided by IR35 Shield:
- Four separate tribunal hearings.
- Judges told HMRC they were wrong on status three times.
- Adams was stuck on the tribunal merry-go-round as her costs rose above the tax at stake.
- HMRC sought to stop evidence from being heard and attempted to adjourn the hearing.
- HMRC solicitors tried to withhold costs payable to Atholl House.
- HMRC’s estimated costs are around £250,000 despite chasing £70,000 in tax.
- HMRC sought to leverage her father’s hospitalisation to win their case.
- Ms Adams often suffered unbearable stress.
The decision comes as a major blow to HMRC, who have been pursuing Ms Adams for unpaid taxes since 2014. The case centered around the question of whether Ms Adams was a “deemed employee” of the BBC during the relevant tax years. HMRC had argued that she should be classified as an employee and therefore liable to pay more taxes. However, the tribunal has consistently found that Ms Adams was genuinely self-employed.
HMRC had argued that Ms Adams was an employee because she was subject to a control and supervision test, and because she did not have the right to substitute another person to do her work.
However, the tribunal found that Ms Adams was not deemed an employee because she was not subject to a control and supervision test, and because she did have the right to substitute another person to do her work. The tribunal also found that Ms Adams was in business on her own account and that she was not a BBC employee.
If IR35 is deemed too problematic to apply, it is surely time for HMRC to work with our legislators to address the flaws rather than picking off decent, hard-working, law-abiding people one by one in the hope that others will buckle under the pressure,” she said.
Kaye Adams
The decision however is a major victory for Ms Adams, who has been fighting the case for nine years. She has said that the mental stress of the case has been “close to unbearable at times,” and that the legal costs she has incurred far outweigh the tax at stake.
The decision is a significant defeat for HMRC, who have been criticised for their “aggressive pursuit of Ms Adams,” according to IR35 Shield which represented Adams.
Ms Adams’s case has also highlighted the “unreasonable approach” that HMRC has sometimes taken in pursuing IR35 cases. The tribunal noted that HMRC had sought to stop evidence from being heard and had attempted to adjourn the hearing. In addition, HMRC solicitors tried to withhold costs payable to Ms Adams.
I was 51 when this all began, and now, at the age of 60, I would really like to be released from my financial limbo and be able to plan for my future.
Kaye Adams
It is estimated that HMRC has spent around £250,000 on the case, despite the fact that the amount of tax at stake is only £70,000, reported IR35 Shield in a statement.
“I was 51 when this all began, and now, at the age of 60, I would really like to be released from my financial limbo and be able to plan for my future,” Adams said. “Having scored a hat-trick of wins, I would politely request that HMRC accepts the emphatic judgment of our courts and desists from appealing yet again.
“There are hundreds of thousands of self-employed freelancers like me in the country. If IR35 is deemed too problematic to apply, it is surely time for HMRC to work with our legislators to address the flaws rather than picking off decent, hard-working, law-abiding people one by one in the hope that others will buckle under the pressure,” she said.
A Significant Victory for Freelancers
The outcome of this case is a significant victory for freelancers across the UK. It shows that HMRC cannot simply ignore the employment status of freelancers and must apply the IR35 rules correctly.
The decision is likely to have implications for other IR35 cases involving freelance workers in the media industry. HMRC has said that they will appeal the decision, but legal experts believe that they are unlikely to be successful.
Dave Chaplin, CEO of IR35 tax advisory firm IR35 Shield, who has been supporting Ms Adams with her case since January 2019 and has assisted at all four hearings, said:
“Kaye Adams is not a tax avoider; she is a victim of HMRC’s intransigence and has been used as a pawn in HMRC’s policy game to try and force media freelancers onto payroll. Regrettably, she has had to pay for HMRC’s expensive strategy that was never really about her. The media sector should thank her for staying the course and not buckling under the immense pressure she endured from HMRC’s litigators.”
HMRC should apologise
IR35 tax advisory firm IR35 Shield, which has been supporting Ms Adams with her case, has called on HMRC to apologise for its “intransigence” and to stop wasting taxpayers’ money on pursuing these cases.
“After HMRC’s failures on their main grounds at the Court of Appeal, HMRC appeared desperate to win the case,” said Dave Chaplin of IR35 Shield. “No one fields three barristers at a first-tier hearing to win a £70,000 case. The attempts to adjourn the hearing spoke volumes, and the sheer pettiness of HMRC’s argument over the transcripts was startling. As for HMRC trying to use her father’s hospitalisation to argue her available working time was reduced, readers can form their own views,” said Chaplin.
“HMRC has 56 days to appeal, but after four hearings, I suggest it is time to concede and stop wasting taxpayers’ money. The only next step HMRC needs to take is to apologise profusely for wrongly pursuing an innocent freelancer.”
Key Takeaways
- HMRC has a duty to ensure that everyone pays the correct tax, but it must apply the IR35 rules fairly and consistently.
- HMRC should not pursue IR35 cases where there is no clear evidence that a freelancer is a deemed employee.
- HMRC should apologize to Ms Adams for the distress that the case has caused her.
IR35 Shield expressed that it hoped this case would send a message to HMRC that it needs to change its approach to IR35. Freelancers should not have to live in fear of being unfairly targeted by HMRC.
What’s Kaye been up to besides court?
Have a listen to Kaye’s podcast How to be 60 which she co-hosts with Karen MacKenzie
