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Where Taxpayers and Advisers Meet
Spot the Difference Ackroyd and Kelly
29/03/2019, by BKL, Tax News - Business Tax
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What’s the difference between Christa Ackroyd and Lorraine Kelly, asks BKL's David Whiscombe.

No: it’s not the start of a joke: it’s a question that has to be asked to understand why two television presenters in ostensibly rather similar circumstances ended up coming away from the First-tier Tax Tribunal with very different results, Ms Kelly in Albatel Ltd v HMRC [2019] UKFTT 0195 (TC) a few days ago and Ms Ackroyd in C Ackroyd Media Ltd v HMRC [2018] UKFTT 0069 (TC), about a year ago.
Both people were anchors for television programmes – Ackroyd for BBC’s Look North and Kelly for ITV’s Daybreak and Lorraine. Both operated through personal service companies. In neither case was there any practical possibility of the work being done by anyone other than the presenter herself: no scope for substitution, in other words. The question in each case was whether IR35 applied – that is to say whether, if the presenter had been engaged personally rather than through a company, she would have been an employee.
In each case the Tribunals rehearsed the case law, recognised that ultimately it was a “balancing exercise” taking into account all the factors and that each case must be determined on its own facts. The Tribunals came to opposite conclusions: Ms Ackroyd would have been an employee and Ms Kelly would not.
In the end it was, essentially, all about the view taken by the Tribunal of “control”. These were live television programmes – so, plainly, in neither case could the television company control the words that were used by the presenter. Much was made in Ackroyd of the BBC’s Editorial Guidelines: to that extent, at least, it was necessary for the BBC to direct and control Ms Ackroyd’s work: she could not, consistent with an obligation to comply with the Guidelines, be considered to have control over the content of Look North or her contribution to it. The length of the contract (at 7 years – Kelly had to make do with 2½) was also considered a significant pointer to employment.
By contrast, ITV were not considered to have sufficient control over Ms Kelly to render the hypothetical contract one of service. The Tribunal was satisfied that she “decided on the running order of the programme, the items to feature and the angle to take in interviews”. Her role was “to provide a programme in any manner she chose”. Certainly ITV did have final editorial control over the programme (and one assumes that ITV, like the BBC, had and have Editorial Guidelines, compliance with which is mandatory): but in Kelly the Tribunal did not accord this ultimate editorial control the same dominant influence over its decision as in Ackroyd.

So, to return to the question we posed, what’s the difference?
In truth – not much, but enough. Without meaning any disrespect to the taxpayers, Counsel or the Tribunal itself, it’s tempting to say that Ms Kelly was luckier. Either case could, perhaps, have gone either way and might have done so on a different day. Such a lottery is no way to run a tax system.

About The Author

BKL is a business name of Berg Kaprow Lewis LLP, Chartered Accountants and Tax Advisers, a limited liability partnership registered in England and Wales.

The information in this article is intended for guidance only. It is based upon our understanding of current legislation and is correct at the time of publication. No liability is accepted by Berg Kaprow Lewis LLP for actions taken in reliance upon the information given and it is recommended that appropriate professional advice should be taken.

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