In a decision released on November 29th 2023 for the hearing that took place in October, the judge upheld Adams’ appeal, confirming her self-employed status once again and rejecting HMRC’s claims that her engagements with the BBC fell under the Intermediaries Legislation.
The origins of HMRC’s inquiry into Adams’s BBC work date back to 2014, claiming her engagements between tax years 2013/14 to 2016/17 were caught by the rules. While claims for the years 2013-15 were later dropped, Adams pursued an appeal to the tax tribunal and emerged victorious in April 2019. However, HMRC persisted, leading to three additional hearings. Ten years after the initial investigation began, none of the four tribunal hearings have supported HMRC’s assertion that Adams was a “deemed employee” of the BBC.
The latest decision will be a significant relief for Kaye Adams, who has been burdened by this case for almost 10 years. Notably, this was the first IR35 case, along with Kickabout Productions Ltd, to reach the Court of Appeal, highlighting the extensive lengths HMRC will go to, to defend its position on IR35 status.
With the First-tier Tribunal re-confirming that IR35 does not apply in Adams’s case, the verdict offers valuable insights for both contractors and engagers. It emphasizes the importance of a nuanced approach in determining IR35 status, considering the overall picture nature of the relationship in addition to just mutuality and control. here
While the case seemingly favoured HMRC at times, Judge Beare noted mitigating factors, such as Adams’s engagement with multiple organisations and the absence of benefits like holiday pay and pension entitlement at the BBC.
The tribunal underscored the need for a thorough examination of the entire employment relationship, considering factors beyond traditional employment tests. In Adams’s case, her history as a freelancer and aspects outside her relationship with the BBC played a crucial role in establishing her self-employed status.
Despite the legal victory, IT contractors probably cannot relate to this case so much, and Ms Adams’ was fortunate enough to afford the extensive legal costs to get her this far, which cannot be said for all. We hope the case will encourage HMRC to adopt a more comprehensive and holistic approach in future IR35 cases and employment status in general. While HMRC retains the option to appeal this latest outcome, we really hope that for the sake of Ms Adams’ sanity (and purse) that they choose not to go down this route.