BBC presenters Joanna Gosling, Tim Willcox and David Eades all worked through their own limited companies when providing services to the BBC.
HMRC later challenged those arrangements, arguing that IR35 applied to most of the contracts.
The three companies were Paya Ltd, Tim Willcox Ltd and Allday Media Ltd. The dispute covered several BBC News and BBC World contracts and eventually reached the First-tier Tribunal, where HMRC won on most IR35 points.
The decision was far from straightforward, however. The two tribunal members disagreed on the main status question, so tribunal judge Harriet Morgan used her casting vote in HMRC’s favour.
Three presenters working through companies
Joanna Gosling supplied her services through Paya Ltd, Tim Willcox through Tim Willcox Ltd and David Eades through Allday Media Ltd.
All three were experienced broadcasters. Gosling mainly worked on BBC News but also appeared on BBC1, BBC2, BBC World and BBC London. Willcox worked mainly on BBC News and also presented on BBC World, while Eades combined BBC World work with other broadcasting and commercial work.
The arrangements ran for several years under a succession of contracts. By 2014, all three presenters had moved onto direct BBC contracts which the BBC treated as employment.
Why the presenters used limited companies
The tribunal heard evidence about how the company arrangements had come about. Gosling said the BBC told her in 2003 that she would need to work through a company if she wanted to continue working on the same basis.
She had wanted the security of employment, but the alternative offered by the BBC involved different work and a significant reduction in pay.
That became relevant when HMRC later argued that the older PAYE assessments could still stand because the presenters or their advisers had been careless.
Most contracts guaranteed a minimum amount of work
For most of the contracts under appeal, the BBC committed itself to a minimum number of days and agreed to pay the contractual fee even if it did not use all of them. The presenters had to make themselves available for enough days to meet those commitments.
The tribunal found sufficient mutuality of obligation throughout those contracts. The BBC promised a defined amount of paid work, and the presenters agreed to provide their services in return for payment.
This differed significantly from other cases where a broadcaster offered individual bookings with no commitment to provide further work.
Two Tim Willcox contracts fell outside IR35
Two of Willcox’s earlier BBC World contracts had no minimum-days commitment. He was paid only for the slots he actually worked, and the BBC was not required to provide him with any particular amount of work.
The tribunal found that those two contracts lacked sufficient mutuality of obligation, so IR35 did not apply.
A later BBC World contract included a minimum number of days for part of its term. The tribunal reached a different result on that agreement and found that IR35 applied.
The BBC retained substantial control
The presenters were experienced journalists and had considerable freedom while carrying out their work. They researched stories, prepared questions and were not generally handed scripts telling them exactly what to say.
The BBC still controlled the wider broadcast operation. It decided when they worked, which programmes they appeared on, the running order and the interviews or items they were expected to handle.
The presenters also had to follow the BBC’s Editorial Guidelines, while the BBC retained final editorial responsibility.
The tribunal found that the BBC retained enough control over the work to satisfy that part of the employment status test.
No right of substitution
The BBC engaged Gosling, Willcox and Eades personally. They could not send another presenter to broadcast in their place.
If one of them was unavailable, the BBC arranged alternative cover itself. As a result, the tribunal found no genuine right of substitution under the contracts.
The BBC relationships lasted for years
Gosling and Eades worked for the BBC under a series of contracts covering roughly five years, while Willcox’s arrangements continued for around seven.
The terms changed little as those contracts were renewed, so the BBC kept using the presenters regularly over a long period rather than bringing them in for isolated assignments.
For Gosling and Willcox, the BBC was also responsible for almost all of the income their companies earned during the years covered by the case.
David Eades had more work outside the BBC
Eades had developed a much broader range of non-BBC work than Gosling or Willcox. His other activities included training, writing and video production, and by the end of the period a substantial share of Allday Media’s income came from clients other than the BBC.
Even so, the tribunal found that his BBC presenting contracts fell within IR35. His wider business activities did not change the terms under which he personally worked for the BBC.
Little financial risk in the BBC work
The companies invoiced the BBC and were generally paid under the agreed contracts. The presenters did not have to make any substantial investment specifically to carry out the BBC work, and there was little risk of them making a loss on it.
Some equipment and other business costs were paid through the companies, particularly by Allday Media, but much of that related to work away from the BBC.
No BBC employee benefits
Gosling, Willcox and Eades received no holiday pay, sick pay, maternity pay or BBC pension rights while working through their companies.
They were also outside the normal BBC staff structure. Gosling gave evidence about the lack of security and employment protection she experienced while working through Paya.
Those differences helped the presenters, but most of the contracts still contained enough features for the tribunal majority to find that IR35 applied.
Why HMRC won on most of the contracts
Most of the BBC agreements guaranteed substantial amounts of paid work and continued on similar terms for several years. The presenters had to make themselves available, do the work personally, and operate within a broadcasting framework controlled by the BBC.
Gosling and Willcox also earned nearly all of their company income from the BBC during the relevant periods. Eades had more work elsewhere, but the tribunal still found that his BBC contracts fell within IR35.
Judge Morgan concluded that most of the hypothetical contracts would have made the presenters employees if they had contracted directly with the BBC. The other tribunal member disagreed, so Judge Morgan cast the deciding vote.
The companies still won part of the appeal
Tim Willcox Ltd succeeded on two of the earlier BBC World contracts because the BBC had made no minimum commitment to provide work under them.
The companies also defeated some of HMRC’s older PAYE determinations because the tribunal found that the extended assessment time limits did not apply.
HMRC said the presenters or their advisers had been careless in deciding that IR35 did not apply. The tribunal disagreed, finding that reaching the wrong IR35 conclusion did not automatically mean reasonable care had not been taken.
Paya compared with other presenter cases
Paya is useful alongside cases such as Canal Street Productions and Albatel, where the presenters won.
The BBC contracts in Paya were more structured and gave the presenters greater certainty over the amount of work they would receive. Willcox’s two successful BBC World contracts are particularly useful because they involved the same presenter and the same broadcaster, but no guaranteed minimum work.
As a First-tier Tribunal decision, Paya does not set a binding precedent. Later tribunals can still consider it, but they are free to reach a different conclusion on similar facts.
For more historical IR35 and employment status cases, read our IR35 case law guide.
Judgment
Paya Ltd, Tim Willcox Ltd and Allday Media Ltd v Revenue & Customs [2019] UKFTT 583 (TC), TC07377.