Television presenter Helen Fospero has defeated HMRC at a tax tribunal in the latest media industry IR35 case. Fospero successfully disputed a tax bill of £80,000 concerning engagements between her limited company, Canal Street Productions Ltd, and ITV during 2012-13 and 2013-14.
Fospero’s presenting work outside of ITV was crucial in establishing that she was in business on her own account. It highlights the importance of working for more than one client, which strongly indicates that contractors are not part and parcel of their engager’s business.
Judge Ashley Greenbank commented: “It seems to me that the agreements with ITV were just part of that wider business carried on by Ms Fospero through Canal Street, in which Ms Fospero undertook various types of presenting work.”
Once again Mutuality of Obligation (MOO) was also a deciding factor. While it was acknowledged that ITV offered an estimated minimum number of days work during Fospero’s engagements, the notion that this amounted to a contractual commitment on either side was rejected by the Judge.
Judge Ashley Greenbank concluded: “In the period in question, Ms Fospero worked under a series of short-term engagements for ITV, she had no guarantee of further work outside those engagements and ITV had no obligation to provide any work.”
The judgment demonstrates the importance of individual circumstances in determining employment status. In turn, this highlights the impracticality of making role-based assessments, which are currently sanctioned by HMRC. The tribunal outcome again puts a spotlight on CEST’s well-documented inadequacies, as the tool fails to include the two employment tests relevant to the case – MOO and ‘being in businesses’.
The government has stated that they remain committed to introducing the reformed rules to the private sector next April. This presents a worrying dilemma for businesses, as the regularity with which HMRC are defeated at tribunal suggest that there is a significant gulf between their interpretation of the rules and that of the courts.
This content has been supplied by IR35 Guru.
For more information on the off-payroll reforms from next April read our article here.
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