PD & MJ Limited v The Commissioners for HMRC
[2024] UKFTT 38 (TC)
Atholl House Productions Limited v The Commissioners for HMRC
29 November 2023
[2024] UKFTT 37 (TC)
First-tier Tribunal
The question was whether a radio presenter was an employee or independent contractor. A court looked at the contract and how the presenter actually worked. Even though the presenter worked a lot for the BBC, she also worked for others, and the BBC let her. The court decided the presenter wasn't an employee because of this, even though the contract had some aspects that looked like an employer-employee relationship.
Key Facts
- •Appeal concerning the application of IR35 to arrangements between Atholl House Productions Limited (Appellant) and the BBC regarding the services of Ms. Kaye Adams.
- •Remitted hearing following previous decisions in the First-tier Tribunal, Upper Tribunal, and Court of Appeal.
- •Dispute over the scope of the remitted hearing: whether Stages 1 and 2 (contractual interpretation) could be reopened.
- •Ms. Adams worked as a freelance journalist for many years, providing services to various organizations.
- •Contracts between the Appellant and BBC contained clauses regarding exclusivity, control, and substitution.
- •The BBC's policy regarding engagement of presenters through personal service companies (PSCs) was a relevant factor.
- •Additional evidence presented at the remitted hearing included industry guidelines, a National Audit Office report, and witness statements from BBC representatives.
Legal Principles
Ordinary principles of contractual construction apply to IR35 cases, without regard to employment context.
Atholl House CA
Three-stage IR35 test: (1) determine actual contract terms; (2) ascertain hypothetical contract terms between client and worker; (3) determine if hypothetical contract is a contract of employment.
ITEPA 2003, 2000 Regulations
Ready Mixed Concrete (RMC) test for contract of service: (i) Mutuality of obligation; (ii) Control; (iii) Other provisions consistent with contract of service.
Ready Mixed Concrete (RMC)
In determining hypothetical contract terms, actual contract terms are highly material but not determinative; circumstances (including parties' conduct) are relevant.
Atholl House UT
In determining if an obligation of personal performance exists (Stage 3A), consider whether personal performance is the dominant feature of the contract, even with substitution rights.
Pimlico Plumbers
For Stage 3C (overall assessment), consider the terms and effects of the hypothetical contract and the circumstances of its creation; no presumption for or against employment.
Atholl House CA
Outcomes
Appeal allowed.
Considering the hypothetical contract's terms and the circumstances, the Tribunal concluded that the relationship would have been one of self-employment, not employment.