Lorraine Kelly wins IR35 battle with HMRC; would you?
8th May 2019A recent series of HMRC high-profile court cases have brought Contractors back into the tax spotlight. TV presenters Lorraine Kelly, Kay Adams and Christa Ackroyd have all defended their working practices with mixed success.
HMRC claimed all three should have been taxed as employees rather than business owners. HMRC won the case against Ackroyd by proving that the BBC had significant control over the work she did.
On the same argument, Adams and Kelly defeated HMRC. Control is the key to determining if a person is self-employed or employed. They were able to prove they were not controlled in the same way an employee is.
Despite losing five out of six recent cases, HMRC are currently running a consultation proposing harsh changes to Contractors in the private sector. Many businesses rely on short term Contractors to expand and grow. The proposed changes will have severe consequences for all parties involved in the labour supply chain.
From April 2020, unless the end Hirer is a small business, Contractors will no longer be able to determine for themselves if they are self-employed or employed. Instead the Hirer will make the decision. HMRC have an online tool to help make an informed judgement, but this has been widely criticised in the press.
HMRC has confirmed that they will be focusing on future compliance and not looking at previous years. However, it would be prudent for Contractors to review their contracts and working practices before April 2020 to avoid unexpected tax liabilities.
Disclaimer - All information in this post was correct at time of writing.
