One year and seven months after we considered ‘Why was Ms Christa Ackroyd deemed inside of IR35?’ by the First Tier Tribunal, we now look at the decision of the Upper Tribunal, on appeal by Christa Ackroyd Media Limited last week.
The original ruling helped bolster the current key aspects of deciding an outside IR35 status (Control, Mutuality of Obligations and Substitution) and explained how Christa Ackroyd Media Limited fell foul of these. Since then, HMRC has lost the next five cases it brought to the first tier tribunal, involving seven TV and radio presenters, including Lorraine Kelly.
Why was this sent to the Upper Tribunal?
Christa Ackroyd Media Limited appealed to the upper tribunal (UT) on the grounds that the First-Tier Tribunal misinterpreted the law when it concluded that the BBC had sufficient control over her actions.
What was the outcome?
Unlike the First-Tier Tribunal when all the key aspects were considered, the Upper Tribunal only looked at the decision with regards to the Control aspect of the relationship between the BBC, Christa Ackroyd Media Limited and Ms Christa Ackroyd. The Barrister for Christa Ackroyd Media Limited argued that it was wrong to insert control as an implied term into the hypothetical contract, and there were no effective sanctions the BBC could apply to enforce control, on the basis that Ms Christa Ackroyd had ‘day-to-day control’ over her work and ‘led the team in the sense of control and decision-making’. The Upper Tribunal rejected this agreeing with the First Tier Tribunal’s conclusion that the BBC retained overall editorial responsibility and control over the content that Ms Ackroyd featured on. They refused to accept that Ms Ackroyd had the final say in issues relating to Look North, or her work on the programme.
How does this impact a contractor operating through a Limited Company?
In short, it doesn’t, BUT it does emphasise the importance of ensuring that prior to the start of any new contract, you should take competent advice as to the suitability of your contract and working practices with regards to IR35.
At Clever Accounts, we provide IR35 reviews as part of the ongoing monthly service and we will explain the factors that will help in the defence of any HMRC investigation into your company.