After enduring a seven-year battle with HMRC, the BBC and ITV presenter and journalist Adrian Chiles has won his £1.7 million IR35 tax tribunal. Continue reading as we discuss the key factors in the presenter ultimately winning the case.
Background to the case
The tax authority had handed Adrian Chiles two significant tax bills – one for Income Tax totalling £1,249,233 and the other for National Insurance Contributions for £460,739. These amounts were for the period between April 2021 and April 2017, relating to the work the host had carried out for the BBC and ITV. HMRC argued that the contracts for the BBC and ITV fell inside IR35, meaning Chiles owed over £1.7 million in tax.
However, after more than seven years and two tribunal hearings, an IR35 case ruling has finally been made for the broadcaster. Judge Jonathan Cannan has ruled in his favour, allowing the appeal relating to services provided to the BBC and ITV between the five tax years spanning 2021 to 2017. He said in his ruling that Chiles’ work contracts were for services and not contracts of employment, meaning IR35 did not apply.
Covid caused long delays
The first hearing took place in November 2019 – five years since HMRC’s investigation. The average wait time for a judgment was a year, but unfortunately, the COVID-19 pandemic made the wait time a lot longer.
Judge Barbara Mosedale conducted the initial hearing in November 2019. She contracted COVID-19 in the early part of the pandemic and unfortunately suffered from long covid. Judge Mosedale was unable to return to judicial work or write the decision. The tribunal subsequently decided that the appeal would be partially reheard and, as a result, meant two more days or oral submissions – two years later in November 2021.
Seven years later and at considerable expense to Chiles, victory was finally achieved. Judge Cannan stated: “we do not underestimate the effect that the delay in determining the appeal must have had on Mr Chiles. There are significant amounts of tax and NICs at stake, and the proceedings must have cast a shadow over his life for much longer than anyone would have wished.”
Victory hinged on Chiles ‘being in business on his own account’
Chiles called on five witnesses to provide oral evidence under cross-examination over a 10-day hearing. The preparation of his defence was thorough, and many points were presented to the tribunal to demonstrate that he was in business on his own account. It includes points such as the following:
- He was an entertainer and a “brand”
- He hired his assistant
- He paid an agency 15% of his fees to manage and develop his career
- He wrote for several national newspapers
- He presented other programmes for multiple production companies
- He developed and pitched his own ideas and contributed to different television programmes
- 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% share of production profits together with Avalon – a television production company, as well as the agency managing him
- He was able to benefit from sound business management
- He had provided his services as a broadcaster and journalist to a significant number of clients – from 1996 to 2019, he contracted with nearly 100 different third parties
The tribunal also considered the financial risk presented to high profile freelance presenters. Evidence provided by ITV indicated: “ITV were “quite good” at looking after their employees but brutally commercial in relation to freelance presenters.” The tribunal accepted Mr Chiles’ evidence that he believed he was ‘at risk’ throughout his career once he left employment at the BBC in 1996.
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