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Would the Real Lorraine Kelly Please Stand Up

by Alan Nelson

In another blow for HMRC, presenter, Lorraine Kelly, has won her IR35 case and is off the hook for £1.2m in income tax and national insurance contributions. The disparity between the advice that is given out as standard to businesses when working with freelancers, and the reality of the rules as evidenced in recent tribunal decisions, looks greater than ever and criticism has come in from all sides.

Deputy Director of Policy at the Association of Independent Professionals and the Self-Employed, Andy Chamberlain, described HMRC as "completely in the dark about their own tax legislation."

Meanwhile, BDO's partner in charge of tax dispute resolution, Dawn Register, questioned HMRC's approach to whole area of IR35 litigation, pointing out that while they claim only to pursue cases to litigation where they have a good chance of winning, they have in fact lost 80% of IR35 tribunal decisions in the last year.

So why did the judge, Jennifer Dean, decide that the contract between Kelly and ITV did not constitute an employment contract? The answer includes several features of the relationship that may be useful in considering other cases:

  • There was little or no control or supervision over Kelly.
  • Kelly was only required to work 42 weeks of the year and had a key role in identifying guest presenters for periods when she wasn't there. In effect she had a right to provide a substitute.
  • She wasn't entitled to holiday or sick pay or pension.

But in some ways the most interesting part of the decision was the distinction between Lorraine Kelly the person, and 'Lorraine Kelly' the brand. Judge Dean found that she presents a persona of herself a brand and that it was that brand that ITV sought when engaging her. Teetering on the brink of absurdity, she added,

    "We should make it clear we do not doubt that Ms Kelly is an entertaining lady but the point is that for the time Ms Kelly is contracted to perform live on air she is public 'Lorraine Kelly'. She may not like the guest she interviews, she may not like the food she eats, she may not like the film she viewed but that is where the performance lies."

Confused? You soon will be!

  1. Nina H
    Posted 11-Apr-2019 at
    It is understandable that HMRC feels like it is missing out on tax revenues with self-employment and PSC rises, but the rules are not always easy to interpret. Often it is not clear 'black and white' but a 'grey' maybe as it depends on interpretation and accredit of value of the various factors. Maybe it would help to make the rules clearer, then b ...
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    1. accountingcpd
      Posted 11-Apr-2019 at
      We agree. The rules are not clear and it is frustrating that the default advice always seems to be that if there is any doubt, you should do it through the payroll. That can be contrary to what both the individual and the business want, and not great ...
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