After seven long years, Adrian Chiles has finally won his IR35 case with Judge Cannan ruling in his favour at an appeal hearing. HMRC had issued Adrian Chiles with a £1.7m tax bill in relation to services provided to the BBC and ITV between 2012 and 2017 through his media company Basic Broadcasting Ltd. Their argument was that these engagements were “inside IR35” and a deemed payment should have been made accordingly.
Chiles won his case by proving that he was “in business on his own account” as illustrated by several points:
- Paying an agent 15% of all income to manage the Adrian Chiles brand;
- Hiring a personal assistant to manage his diary and admin;
- Carrying out unpaid activities in order to grow his brand;
- Chiles developed and pitched his own ideas;
- Financial risk with Chiles’ income fluctuating according to the volatility of being a successful presenter;
- Presenting other TV programmes for other production companies.
Whilst the engagements in question at the BBC and ITV would have been “inside IR35” on the basis of control, the above factors pointed firmly towards Chiles being in business on his own account, and this outweighed the control factor.
The outcome of this case illustrates the importance of all contractors operating through their own limited company to ensure that they are genuinely in business on their own account, otherwise they are at risk of being targeted by HMRC. This was an extremely long case with HMRC’s approach being flawed in many ways, not least that the evidence which convinced the judge in Chiles’ favour was presented at the outset. Let’s hope that lessons have been learned at HMRC.