The next high-profile TV presenter that HMRC has its focus on over their IR35 status is Eamonn Holmes. His company, Red White and Green Ltd has been awaiting the Court’s ruling over whether he has been operating inside IR35 regulations as per HMRC’s allegations.
Trading as a contractor through a limited company has its tax advantages through paying a lower rate of corporation tax which currently stands at 19%. HMRC can challenge these companies by claiming they are actually a disguised employee and therefore should be taxed as if they were an employee subject to PAYE and NI. For Mr Holmes, this could mean he faces tax at a rate of 45% of his income given his company suggests he earns £700,000 per annum.
3 Silver Bullets
It is reported that HMRC believes they are able to win the case solely on mutuality of obligation, meaning there was an obligation for the work to be provided and for Mr Holmes to carry it out. However, mutuality of obligation is only one of three silver bullets that support whether a company is operating inside or outside of IR35 regulations.
Personal service and control are the other two considerations.
Mr Holmes is not the first TV personality to be targeted, as the BBC presenter Christa Ackroyd is appealing the ruling which found her inside IR35. Should the ruling remain in HMRC’s favour, Ms Ackroyd is facing a tax bill reportedly over £400,000.
As Mr Holmes is the highest profile person that has been challenged so far, speaking to the Mail on Sunday, he believes he is the victim of a “test case” by HMRC because “if they win against me they will go after everyone else, everyone. Ant and Dec will be next”.
An HMRC spokesman told the Mail on Sunday “It is clear that most TV presenters will fall into the category of being employees based on the nature of their work, and the policy that sets this out has been the same for years”.
Other presenters that could be at risk include Philip Schofield and Holly Willoughby.