Albatel Ltd v HMRC [2019] UKFTT 195 (TC) concerned Lorraine Kelly’s work for ITV between 2012 and 2016.
Kelly provided her presenting services through Albatel Ltd. HMRC argued that, if ITV had contracted with her directly, the relationship would have been one of employment and IR35 would have applied.
Judge Jennifer Dean disagreed. She found that Kelly had considerable freedom over the way she presented the programme and that ITV was buying the services of an established television personality rather than engaging somebody to perform a tightly controlled presenting role.
Lorraine Kelly’s ITV contract
The dispute covered Kelly’s work on ITV’s Lorraine programme during the tax years from 2012 to 2016.
She appeared regularly on the programme and worked within ITV’s production schedule, but the tribunal found that her role involved much more than turning up and presenting material prepared by somebody else. Kelly had a significant say in the content of the programme and considerable freedom over the way she delivered it.
HMRC’s case was that the hypothetical contract between Kelly and ITV contained the features of employment. The tribunal had to establish the terms of that direct relationship and then apply the employment status tests.
The Lorraine Kelly persona
Kelly’s on-screen personality featured prominently in Judge Dean’s decision. She had developed a recognisable broadcasting style over many years, and ITV wanted that style to form part of the programme.
Judge Dean said:
The Lorraine Kelly who appears on the television for the show is a persona, a personality. She presents a friendly, chatty and fun personality.
Kelly was able to influence the content and presentation of the programme, including the way she conducted interviews and interacted with guests. Her personality and broadcasting style were part of the service being supplied by Albatel.
ITV had engaged Kelly because of the particular broadcaster she was, rather than simply to fill a presenting position.
Control
ITV controlled matters which naturally sat with the broadcaster. It decided when the programme was transmitted, operated the production facilities and retained editorial responsibility for what went on air.
Kelly nevertheless had considerable freedom within that framework. She decided how she presented material, the tone she adopted and the way she dealt with guests and subjects on the programme.
The tribunal did not find that ITV exercised the degree of control over her performance that HMRC argued for.
This differed from Christa Ackroyd Media Ltd v HMRC. Ackroyd also had professional freedom as an experienced broadcaster, but the BBC retained greater contractual control over her role and the Upper Tribunal upheld the finding that her hypothetical contract was one of employment.
Kelly’s work outside ITV
Kelly had built a broadcasting career and public profile which existed independently of the Lorraine programme. Her value to ITV was closely connected to that reputation.
The tribunal considered her wider professional activities and the commercial position of Albatel when assessing the ITV engagement. Kelly was not presented as an ordinary member of ITV’s staff and retained scope to undertake other work.
See also business on your own account and Hall v Lorimer.
Mutuality of obligation
Kelly had worked regularly for ITV for several years, but the contracts dealt with the presenting work which had actually been agreed rather than giving her an entitlement to continuing work from ITV beyond those arrangements.
The tribunal considered the obligations created by those contracts alongside the other terms of the hypothetical relationship.
Later cases have dealt more closely with the minimum mutual obligations needed during an individual engagement. In HMRC v PGMOL, the Supreme Court confirmed that those obligations may exist during work which has been accepted even where neither side is committed to future engagements.
Read more about mutuality of obligation.
Why Albatel won
Kelly worked to ITV’s programme schedule and within its editorial framework, but she retained substantial freedom over the part of the job for which she had specifically been engaged: presenting the programme as Lorraine Kelly.
Her style, personality and established audience appeal were central to that arrangement. The tribunal also considered her wider professional activities and the commercial position of Albatel.
Judge Dean found that the hypothetical contract between Kelly and ITV would not have been a contract of employment.
Albatel’s appeal was allowed.
Albatel and Christa Ackroyd
Albatel and Christa Ackroyd Media Ltd both concerned established television presenters, but they produced different results.
Ackroyd worked under two fixed-term BBC contracts which required her services for up to 225 days each year. The BBC retained sufficient control over her role and editorial work, and the other terms of the hypothetical contract supported employment.
Kelly’s ITV arrangements gave her substantially more freedom over the way she performed the presenting role. Her established persona also formed part of what ITV was buying from Albatel.
The occupation was similar. The contracts and working arrangements were not.
Judgment
The First-tier Tribunal decision was released by Judge Jennifer Dean in 2019:
Albatel Ltd v HMRC [2019] UKFTT 195 (TC), TC07168.
HMRC also discusses the case in its Employment Status Manual, ESM3136J.