HMRC experiences new IR35 defeat
HM Revenue & Customs (HMRC) has once again been defeated in another high profile IR35 tribunal case.
Paul Hawksbee, a veteran radio presenter and comedy writer, successfully challenged the tax authority after he was told that he owed £140,000.
A presenter on ‘The Hawksbee and Jacobs Show’, his services were engaged by broadcaster TalkSport from 2012-2015 through his limited company Kickabout Productions Limited (KPL).
During the recent tribunal, Hawksbee appealed an IR35 status determination spanning KPL’s engagement with TalkSport during this period.
His limited company had entered into two separate contracts, with each requiring that Hawksbee provide his on-air services for a minimum number of days per year from 1-4pm.
Hawksbee received a fee per programme for these services. Each contract also stipulated that the parties would enter into good faith negotiations regarding an extension at the end of each contract.
The arrangement between KPL and TalkSport had been established in 2000 when the presenter started out on what is now the longest running show on the station.
HMRC claimed that his time at the station as a presenter indicated that he had a significant degree of stability in his employment and that his regular presence made him ‘part and parcel’ of the radio station.
Despite HMRC’s arguments, the tribunal found that while Hawksbee had a regular show, he was never subject to appraisals nor disciplinary processes.
It also said that his time at the station, as defined by his contract, was dependent on the success of his programme and that his contract via KPL could have been terminated at the end of each contract.
The tribunal ruled that Hawksbee displayed a high degree of economic dependency, even though HMRC had said that Hawksbee wasn’t in business on his own account.
It was also revealed that he had turned down the opportunity to work as a writer on ‘Taskmaster’ as it would have clashed with his presenting responsibilities, showing that there was financial risk in his role as a presenter.
TalkSport had held control over the “where” and “when” Hawksbee worked but he was “afforded an extremely high degree of autonomy by TalkSport”. None of the contracts offered a substitute in his absence, but “TalkSport were contracting for the unique expertise and work product of Mr Hawksbee”.
This is another important case for contractors and the self-employed as it once again demonstrates the flaws in the IR35 regime and how determinations can be challenged.