The radio presenter unsuccessfully appealed a 2020 Upper Tribunal decision which deemed IR35 - legislation designed to tax 'disguised' employment at a rate similar to employment - did apply while he worked for Talksport between 2012 to 2015.
Hawksbee provided his services as a freelancer through his limited company, Kickabout Productions. He presented Talksport Radio’s “Hawksbee & Jacobs Show”, a three-hour radio programme broadcast every weekday from 1pm to 4pm.
The judgment, published today (April 26), related to the tax years 2012/13 to 2014/15, totalling £89,758 in Income Tax and £53,368 in national insurance contributions.
After a First Tier Tribunal in 2019 found in favour of Hawksbee, an appeal made by HMRC was then upheld in a judgment by the Upper Tribunal.
Hawksbee had appealed on grounds that the Upper Tribunal had “erred” on a number of issues, including in its interpretation of the contracts he had signed with Talksport.
But in the Court of Appeal today, Sir David Richards said: “In my judgement, Kickabout Productions’ submissions disclose no error of principle or approach by the Upper Tribunal and are in substance no more than an attempt to re-argue the issue. I would accordingly reject this ground of appeal.”
Richards said it was wrong to suggest the Upper Tribunal “needed to have all the evidence before it” when it had the First Tier Tribunal’s “unchallenged findings of fact on all relevant matters”.
Elsewhere, HMRC was also granted an appeal of a judgment made in BBC Radio Scotland host Kaye Adams’ favour at the Upper Tribunal in 2021.
HMRC won one high profile IR35 case and will feel it has the upper hand in another.Seb MaleyThe Court of Appeal has instructed for this case to be reheard. The case carries approximately £124,000 of tax liability and relates to her time hosting The Kaye Adams Programme.
In Adams’ case, she provided her services to the BBC through her company Atholl House Productions Limited over the tax years 2013/14 to 2016/17.
Richards, who also sat in on this case, said of Adams’ case: “The Upper Tribunal largely failed to take account of the many features of the contractual terms and their effects, some of which may be seen as pointing to an employment relationship while others may be seen as consistent with Ms Adams being an independent contractor.”
Though the court did reject one of HMRC’s grounds for appeal, arguing freelancer contracts, “like any other agreement in writing”, should not be construed “in a vacuum” but rather in the light of all the admissible facts.
On the Atholl House judgement, a HMRC spokesperson said it "agreed the Upper Tribunal had not applied the law correctly".
They also welcomed the judgement on Hawksbee's Kickabout Productions, which agreed the off-payroll rules apply in this case.
"These rules ensure people who work like employees pay tax like employees, creating a level playing field for everyone," said the taxman.
The government department said it has won "more than 80 per cent" of employment status and off-payroll cases since April 2019.
Seb Maley, chief executive of Qdos, commented on the judgements: “HMRC won one high profile IR35 case and will feel it has the upper hand in another, which will be reheard in due course.
“With the Hawksbee victory under its belt, HMRC’s appetite for investigations may grow. But this shouldn’t scare contractors or the businesses engaging them. If anything, it serves as a firm reminder about the importance of compliance.
“And while Kaye Adams’ IR35 battle looks set to continue for some time, this wasn’t a win for HMRC – albeit a positive development for the tax office.”
Maley argued that the fact both cases progressed to the Court of Appeal just goes to show how complex and ambiguous IR35 legislation is and how easy it is to misinterpret and misapply it.
“A mistake can cost hundreds of thousands, if not millions of pounds,” he said.
In February, Radio 5 Live presenter Adrian Chiles won a seven-year long tax liability case to the tune of £1.7mn against the taxman.
A first-tier tax tribunal ruled in Chiles’ company’s favour, concluding the work contracts during this period were for services and not contracts of employment, meaning IR35 did not apply.
In November 2021, former Sky Sports TV presenter Dave Clark lost his IR35 appeal against HMRC, which saw him handed a £281,000 tax bill. TV sports host Gary Lineker's £4.9mn tax battle continues, whilst broadcaster Lorraine Kelly won her case over a £1.2mn bill.
ruby.hinchliffe@ft.com
