In Oscar Wilde’s ‘The Importance Of Being Earnest’, Lady Bracknell famously says, “To lose one parent, Mr Worthing, may be regarded as a misfortune; to lose both looks like carelessness”. The same can be said of HMRC’s recent successive defeats at the First-Tier Tribunal at the hands of, first, Lorraine Kelly and now Kaye Adams of Loose Women fame – just replace “parent” with “IR35”. 

Who is Kaye Adams and why did HMRC target her as inside-IR35?

Kaye Adams has been a freelance journalist since the mid-1990’s and is probably best known for her appearances on the ITV programme Loose Women. She has also appeared on the newspaper review on Sky and has written columns for various national newspapers and magazines.

In 2007, Ms Adams formed her own personal service company (PSC), Atholl House Productions Ltd. It was through this company that she provided her services to the BBC whilst presenting a programme on BBC Radio Scotland called The Kaye Adams Programme, a show that ran for 3 hours on each weekday morning. HMRC claimed that IR35 applied for the four tax years ended 5th April 2017 and raised the necessary tax and NIC assessments. However, shortly before the actual tribunal hearing, HMRC dropped their opposition to the appeal against the years 2013/14 and 2014/15. The total liability for the two remaining years, 2015/16 and 2016/17, was approaching £125K.

What was in Kaye Adams' contract to suggest IR35 applied?

For the two years in dispute two agreements were in place between the BBC and Atholl House. Each written agreement contained the following main points:

  • A minimum commitment of 160 programmes during the term of each agreement, in return for a minimum fee of £155K. Where the BBC required Adams to exceed the minimum commitment, then an additional fee of £968.75 per programme would be paid;
  • Assignment or sub-contracting was not permitted but, in exceptional circumstances, a substitute could be appointed subject to prior notice being given to the BBC;
  • Adams was required to read and fully comply with the BBC’s Editorial Guidelines and Guidance, and the BBC’s Standards;
  • Adams would make herself available to complete such editorial training as the BBC might, from time to time, require;
  • Adams would temper her comments when asked to by the BBC;
  • The BBC’s editorial control of its content “is final”;
  • The BBC could suspend the contract for up to 3 months in the event that Adams brought the Corporation into disrepute with a corresponding adjustment to the minimum fee. Suspension could also arise if Adams became political active;
  • At the reasonable request of the BBC, Adams would undergo a full medical examination.
  • Adams was not an employee of the BBC;
  • Although Adams’ services to the BBC were not exclusive, the Corporation would have first call on her freelance services subject to her having any prior professional commitments. Furthermore, Adams would not work for other third parties without the prior written consent of the BBC, albeit that consent would not be unreasonably withheld;
  • Adams would be responsible for providing her own clothing; and
  • Atholl House was responsible for all necessary insurances.

In typical fashion, where the facts do not suit their arguments, HMRC’s case relied heavily on the contractual terms.

End client IR35 evidence

Adams pointed out to the Tribunal that her work for the BBC during all four years ending 5th April 2017 had been no different in terms of content or approach, so why then did HMRC decide not to contest the earlier two years?

Evidence from a former editor in charge of the Kaye Adams Programme, Mr Paterson, likened Ms Adams to the conductor of “her Orchestra” and that the team, together with Adams, would discuss the content of each programme and decide on the format. As such there was never any need to insist on editorial control over the programme’s content.

Paterson told the tribunal that BBC Guidelines, just like the OFCOM code, left both the editorial team and presenter with considerable discretion as to how they should be applied in any particular scenario.

He also confirmed that:

  • Adams did not need to seek BBC permission to take on any of her other engagements;
  • If the BBC did not schedule programmes so that all 160 programmes were produced because of its own reasons as opposed to Adams not being available due to other commitments, then Atholl House would still be entitled to their fee;
  • Whilst in the studio, the BBC would provide Adams with headphones, a computer and she would also have access to the BBC’s messenger service to enable her to communicate with the team during the show. However, Adams also used her own laptop and Ipad both inside and outside the studio; and
  • There were differences in the way which the BBC dealt with Adams and its own employees.

HMRC’s view on Kaye Adams' IR35 case

Whilst the Revenue accepted that the process of presenting the programme was very largely collaborative nevertheless, the BBC retained ultimate control over the content of the programme.

The contract made it clear that Adams could not work for other clients without the BBC’s prior written consent, so it must have been true!

With regard to contractual clauses relating to control, although the BBC may not have chosen to exercise some of their rights of control, such rights were capable of being exercised. This was demonstrated when, in 2011, Adams was suspended following a tweet concerning Boris Johnson.

That Atholl House had other income streams was irrelevant as, taken in isolation, the BBC hypothetical contract was one of employment.

Adams had pointed to the fact that she was not entitled to any of the typical employment rights, such as holiday or sick pay etc. This was not in the least surprising as the contract was a commercial agreement between two companies, so it would inevitably not include such benefits.

What were the Tribunal’s findings in Adams' IR35 case?

Right of control

Although the BBC might have exercised a “light touch” when it came to exercising editorial control over Adams, the fact was it had the contractual right to exert that control, not least because it had ultimate responsibility for the content of that programme. The editorial team could have pulled rank on Adams in relation to editorial matters if, at any stage, where disagreement between the parties as to the content of a particular programme reached impasse.

If the BBC had insisted on Adams attending editorial training and to undergo a medical then that was found to be a realistic right.

The BBC’s control did not extend to control over the identity and nature of Adams’ other engagements but that was not to say that the Corporation had absolutely no control over the manner in which she conducted her other activities, as the BBC would have been concerned that she did not say or write anything which might bring them into disrepute or subject them to OFCOM sanctions. That said, such level of control was not considered significant.

Whilst the contracts specified that the BBC had first call on Adams’s time the reality was just the opposite.

Mutuality of obligation (MOO)

MOO was considered to be present chiefly because the BBC would have been obligated to pay Atholl House if it decided it did not wish Adams to fulfil the Minimum Commitment. Whilst it may well have been true that Atholl House would not have been paid in the event that Adams was unavailable, this was neither here nor there.

Business on own account

Adams had told the Tribunal that she was aware of the need to build and manage her own reputation and brand, for example, by developing her own social media presence and by managing her engagements in such a way as to increase her public profile. It also seemed to the Tribunal that Adams’s professional identity was linked more closely to Loose Women than to the BBC.

Taking these features into account, it appeared to the Tribunal that Adams was carrying on a profession on her own account, in the same way that the vision mixer, Mr Lorimer, did in the case of Hall v Lorimer [1993]. In the Hall case, the judge explained that where someone is carrying on a profession or vocation, then the business on own account test may be of little assistance and it is more meaningful to consider the extent to which an individual is dependent on one particular paymaster, the length of engagements and the number of different clients.

Both Adams and HMRC agreed that the BBC fee represented over 50% of Atholl House’s turnover. However, the company’s other income could not be disregarded as irrelevant to the overall picture, even if it only represented HMRC’s disputed calculation of 30%, on average, of Atholl House’s turnover over the two tax years in question. 


The BBC never exercised its right to ask Adams to attend editorial training and to undergo a full medical, which signalled to the Tribunal the way in which the Corporation viewed its relationship with Adams, i.e. not as part of the organisation but as an external services provider.

Employee type benefits

Ignoring HMRC’s interpretation of the absence of certain employment rights, the Tribunal took the opposite view, that this was a pointer away from an employment relationship. Yet again the Revenue’s simplistic view and instant dismissal of this factor has been shown to be false by yet another tax tribunal but yet again HMRC are not getting the message!

So having failed the three golden tests of employment status, i.e. right of control (in this case BBC’s editorial control), personal service and MOO, why did the Tribunal find in favour of Adams? Refreshingly, the judge followed the prerequisites for the existence of a contract of employment as laid down in the case of Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968], i.e:

  • The servant agrees that in consideration of a wage or other remuneration he will provide his own work and skill in the performance of some service for his master (personal service and MOO);
  • He agrees, expressly or impliedly, that in the performance of the service he will be subject to the other’s control in a sufficient degree to make that other master; and
  • The other provisions of the contract are consistent with its being a contract of service.

It is therefore necessary to demonstrate that all three of the above are present to make IR35 stick but all too often point (3) is glossed over and not explored in sufficient detail.

The distinction between Christa Ackroyd and Kaye Adams

At face value, Adams’ situation appeared similar to that of Christa Ackroyd who lost her appeal at tribunal last year. What set the two apart, however, was:

  • Christa Ackroyd Media Ltd’s contract with the BBC was 7 years long and followed one that was 5 years in duration. This was in contrast to Adams’s case where each contract was for around one year;
  • Christa Ackroyd’s income was almost solely from the BBC whereas Adams had several different sources of income;
  • Ackroyd was given a clothing allowance whereas Adams was not;
  • The BBC had first call on Ackroyd’s time and could tell her who she was interviewing, and Ackroyd attended BBC training sessions; and
  • Ackroyd was required to obtain the consent of the BBC for her non-BBC engagements whereas Adams was free to work for other clients without such constraints.

This is the fifth of six IR35 cases that HMRC has lost since the introduction of the off-payroll rules in 2017, causing some commentators to remark that HMRC does not understand employment status. I, on the other hand, take the opposite view as I believe the department are quite deliberately choosing to interpret the facts, or even completely disregard them, to suit their own ends. Thankfully, tax tribunals are rebuffing them at each turn but still they come back for more. When will they wake up, smell the coffee and stop wasting taxpayers time and money in pursuing lost causes and return to treating taxpayers with equal fairness?

Additional IR35 advice for accountants

A genuine contractor, freelancer or consultant who is in business on their own account shouldn’t have anything to worry about when it comes to IR35. However, contract reviews are always advisable; whilst you may know that they're legitimate, IR35 determinations are notoriously subjective.

Should you want some peace of mind, we offer a full contract review amongst other services to help you prepare for IR35. We’ll give a pass or fail based on the current contract you hold, along with comprehensive comments on how to improve any problem areas.

We also offer IR35 investigation representation from our Head of Tax and resident IR35 expert Andy Vessey ATT should it go to tribunal.

For any further information or advice, please call us on 01163 800 400 or drop us an email. Alternatively, take a look around our Knowledge Hub for more IR35 advice, industry news and contractor guides.

Image Credit: Ken McKay/ITV/REX/Shutterstock

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