HMRC wins first IR35 case since 2011

Former BBC presenter Christa Ackroyd lost her appeal against the tax authority when the FTT ruled that her personal service company, Christa Ackroyd Media Ltd, owed income tax and national insurance contributions (NICs) amounting to £420,000 for the tax years 2006/07 to 2012/13. This judgment is the first of a number of IR35 appeals involving television presenters who operated through personal service companies, following the mass IR35 clampdown in October 2016, with further rulings likely to arrive later this year. It is also the first IR35 case to be reported in seven years, and the first comprehensively won by HMRC since 2009.

Ackroyd co-presented the BBC's Look North programme and was engaged through her company, Christa Ackroyd Media Ltd, by the BBC on a seven-year contract to provide her services up to 225 days per year. It was reported in 2013 that after a three-month period spent off air, Ackroyd had been sacked by the corporation following an alleged dispute surrounding her freelance status and payment of tax. Court documents showed that the BBC terminated the arrangement following HMRC’s formal demand against Ackroyd’s company for unpaid tax, despite the insistence by the BBC that she offer her services through a limited company.

Ackroyd contended that her status for the purposes of the IR35 legislation was that of a self-employed contractor, and there was no further tax liability on the part of CAM Ltd. HMRC argued that hypothetically she was engaged under a contract of service rather than a contract for services, therefore she should be treated as an employee of the BBC. The IR35 rules were thus in point, and her company was required to pay the appropriate amount of tax and NICs based on here deemed employment. The FTT sided with HMRC, deciding that Ackroyd could not fairly be described as being in business on her own account. The ruling stated that she was “economically dependent on the hypothetical contract with the BBC”, which took up most if not all of her working time.

Additional Reporting Requirements for PSC

From the 26th of June onward information on people with significant control (PSC) won't be updated on the confirmation statement (form CS01) on a yearly basis anymore. Instead, one needs to inform Companies House using new forms (forms PSC01 to PSC09) whenever there’s a change.

You have 14 days to update your PSC register and another 14 days to send the information to Companies House. Companies House will need to be informed if anyone (or any entity):

• becomes a PSC
• ceases to be a PSC; or
• their details change, such as the extent of their control or their address. 

This will make the requirements for PSCs very like those of company officers, where changes to a director or secretary have been filed on an event-driven basis for some time. This update to the information required about PSCs arose due to a change in anti-money laundering legislation; the spirit of which is aimed at increasing the transparency of ownership and control of companies in the UK and ensuring the information is more current.