Upper Tribunal confirms IR35 applies to Eamonn Holmes’ work for ITV

In Red, White and Green Limited v HMRC, the Upper Tribunal (UT) has concluded that the First-tier Tribunal (Tax Chamber) (FTT) did not err in finding that IR35 applied to the work that Eamonn Holmes did on the ITV show, This Morning. This is the first time that the UT has had an opportunity to consider the issue of employment status since the Court of Appeal handed down its judgments in Kickabout v HMRC and HMRC v Atholl House.

Red, White and Green Limited (RWG), the personal service company of Eamonn Holmes, provided its services to ITV under a series of annual contracts. They obliged Mr Holmes to present the show on most Fridays and during certain school holidays. RWG challenged the FTT’s decision on two bases – that it had misapplied the test of ‘control’; and that it incorrectly applied the third stage of the classic test for employment status from the judgment of MacKenna J in Ready Mixed Concrete.

Regarding ‘control’, the UT followed the previous decision of the UT in Atholl House and found that control of ‘what’ work is done by a worker is not the pre-eminent form of control and does not require the putative employer to have a right to deploy the worker to different tasks. There can therefore be a sufficient contractual right to control what work is done even if an individual is contractually engaged to perform a particular task (e.g. present a particular show). The UT confirmed that in the context of TV and radio presenters, which have been the focus of many recent IR35 decisions, the editorial right of control enjoyed by the broadcaster, and the controls required by the broadcaster to comply with regulatory requirements, are both highly relevant factors.

Regarding the third stage of the Ready Mixed Concrete test, the UT found that there was no error by the FTT in its overall evaluation of whether the hypothetical contracts between Mr Holmes and ITV would have been contracts of employment. In particular, the FTT had correctly taken into account the work that Mr Holmes did for other engagers and his arguments that he was in business on his own account. This decision will be relevant to cases in which the individual has carried out engagements for multiple clients.

Christopher Stone was instructed by HMRC, led by Adam Tolley KC

A full copy of the decision can be found here.

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