Tax  

TV presenter Holmes latest to lose tax battle

TV presenter Holmes latest to lose tax battle

TV presenter Eamonn Holmes has lost his battle against HM Revenue & Customs in an IR35 tax case after a judge deemed his contract with ITV amounted to employment.

In an appeal decision published on February 21, in relation to a case first heard at the First Tier Tribunal Tax Chamber in June 2018, Judge Harriet Morgan ruled Mr Holmes was employed by TV station ITV and therefore liable to pay tax under the taxman's IR35 rules. 

Mr Holmes, via his personal services company Red White and Green Limited, argued he was "totally freelance" and claimed he had "total control" over how he acted as a presenter on ITV's This Morning show. 

The TV presenter said he was paid as a freelancer through Red White and Green Limited and therefore did not owe income tax and national insurance contributions as claimed by HMRC for work between 2011 and 2015. 

The taxman's claim falls under the controversial IR35 rules - an anti tax avoidance measure which applies to all contractors and freelancers who do not fall under HMRC’s definition of being self-employed.

It is designed to target workers supplying their services to clients via an intermediary, such as a limited company, but who would be an employee if the intermediary was not used.

Judge Morgan said: "I have concluded that there was sufficient mutuality and at least a sufficient framework of control to place the assumed relationship between ITV and Mr Holmes in the employment field.

"On that basis and, having regard to all other relevant factors, my view is that overall, throughout all relevant tax years, the assumed relationship between ITV and Mr Holmes was one of an employment rather than self-employment."

HMRC has been seen to increasingly crackdown on taxpayers in this area, with fellow TV presenter Kaye Adams pursued for thousands in alleged missing tax under IR35 rules last year. 

But Ms Adams emerged victorious from her battle with the taxman, leading to accusations the latter did not understand its own legislation surrounding the tax treatment of freelancers and contractors.  

Dave Chaplin, chief executive at freelance commentator Contractor Calculator said it was surprising to learn that Mr Holmes lost his IR35 case despite being a freelancer for almost four decades and working for a variety of broadcasting companies.

Mr Chaplin said: "The IR35 case law for broadcasters in the media sector appears to have tied itself into knots. It’s difficult to understand how the rules have not applied to some presenters, but yet they do for Eamonn Holmes.

"Many of these cases are going to Upper Tribunal where we hope to see some clarity to the law. But that could be years away." 

An HMRC spokesperson said: "HMRC welcomes the judgement, which confirms that we took the right approach.

"The tax rules require that employment taxes are paid even where a person works through their own company. HMRC ensures that tax is paid in accordance with those rules."