ANOTHER VICTORY NOTCHED UP AGAINST THE TAXMAN BY RADIO PRESENTER
HMRC has lost another high profile IR35 tribunal case after radio presenter and comedy writer Paul Hawksbee successfully challenged a deemed tax bill of roughly £140,000.
The tribunal reached its decision by the casting vote of Judge Thomas Scott, having considered an engagement between Hawksbee’s limited company Kickabout Productions Limited (KPL) and broadcaster Talksport from 2012-2015.
Hawksbee won his appeal despite having been a co-presenter of ‘The Hawksbee and Jacobs Show’ on Talksport since 2000, a factor which HMRC had placed considerable emphasis on. However, in the broader context, this bore limited weight in the eyes of the tribunal.
Taxman’s arguments fall flat
Hawksbee appealed an IR35 status determination spanning KPL’s engagement with Talksport spanning 2012-2015. Over this period, KPL entered into two separate contracts. Although they differed somewhat, they each required that Hawksbee provide his on-air services for a minimum number of days per year from 1-4pm.
Hawksbee was paid a fee per programme, and each contract stipulated that, prior to the end of the term, the parties would enter into good faith negotiations regarding an extension. KPL had been engaged by Talksport on a similar basis since Hawksbee began presenting in 2000 what is now the longest running show on the station.
HMRC contested that Hawksbee’s stint as co-presenter was an indicator of employment in that it suggested a significant degree of stability, while also arguing that Hawksbee’s continued on-air presence made him ‘part and parcel’ of the Talksport organisation.
However, the tribunal dismissed the taxman’s claims concerning part and parcel, acknowledging, amongst other factors, that he was not subject to appraisals nor disciplinary processes. Limited weight was also granted to Hawksbee’s tenure as presenter, as the tribunal agreed that contract renewals were dependent on the continued success of the programme.
Key employment status factors
Limited weight was granted to the key employment status tests, with factors such as financial risk – ignored by HMRC’s Check Employment Status for Tax (CEST) tool – coming to the fore.
During the three years in question, the Talksport contracts constituted 90% of Hawksbee’s total income, which the tribunal agreed displayed a high degree of economic dependency. HMRC argued that this indicated that Hawksbee wasn’t in business on his own account.
However, the tribunal noted that, for Hawksbee, opportunity cost resulted in financial risk, acknowledging the fact that he had to turn down the opportunity to work as a writer on ‘Taskmaster’ as it would have clashed with his presenting responsibilities.
Mutuality of obligation (MOO) was deemed of relatively little importance. However, the tribunal again reaffirmed HMRC’s flawed interpretation of the employment test by acknowledging that, while there was the ‘irreducible minimum’, a sufficient degree of MOO wasn’t present to indicate employment.
Though it was agreed that Talksport held control over the “where” and “when” concerning the work, this wasn’t considered strongly indicative of employment due to the nature of the work. Hawksbee was “afforded an extremely high degree of autonomy by Talksport”, with the Judge concluding: “editorial and artistic control of the content and format lay almost entirely with Hawksbee”.
While neither arrangement afforded Hawksbee the right to provide a substitute, this was rendered a neutral factor, given that “Talksport were contracting for the unique expertise and work product of Mr Hawksbee”.
IR35 CHANGES IN APRIL 2021 (AGAIN)
The IR35 changes in the private sector previously scheduled for April 2020, will go ahead on 6 April 2021 The Government has now published the Finance Act which contains the final text of the off-payr ...
CHANGES ON HIRING EU WORKERS DECEMBER 31ST
CHANGES ON HIRING EU WORKERS DECEMBER 31ST Have you seen the latest news with regards to the changes to hiring workers from the EU. The transition period is ending on 31 December and there will be no ...
DELAY IMPLEMENTATION OF IR35 LEGISLATION REFORM UNTIL COVID-19 IS RESOLVED
Freelancers play a vital role in the UK economy and are the changing face of work. This petition requests the Government to delay the implementation of the upcoming IR35 legislation until COVID-19 i ...
FINANCIAL SUPPORT FOR SELF-EMPLOYED PEOPLE TO INCREASE
Chancellor Rishi Sunak this morning said that self-employed people would be given extra support due to the onset of a new national lockdown. Speaking to the BBC, he said that the cap on the current gr ...
FURLOUGH SCHEME EXTENDED AND FURTHER ECONOMIC SUPPORT ANNOUNCED
The Coronavirus Job Retention Scheme has been extended for a month with employees receiving 80% of their current salary for hours not worked and further economic support announced. People and business ...
SITES TO STAY OPEN AS SECOND LOCKDOWN BEGINS IN ENGLAND NEXT WEEK
New measures will remain in place until 2 December Construction sites will be able to stay open, as the prime minister this evening (31 October) confirmed a second lockdown in England will begin th ...