A Scottish media presenter, Kaye Adams has won a long-running IR35 case against the HMRC after nine years and four tax tribunal hearings.

The four hearings focused on the contract Adams held with BBC Radio Scotland during the 2015/16 and 2016/17 tax years. HMRC contested Adams’ status as a self-employed contractor and viewed her services as resembling employment.

HMRC pursued Adams for £124,000, which would have likely been reduced to around £70,000 once taxes already paid by her personal services company Atholl House and Adams were taken into consideration.

The latest tribunal concluded that the factors pointing towards employment were outweighed by the factors pointing in the direction of a self-employment relationship and reflected that the BBC did not treat Adams as an employee in any way.

The latest decision could have significant implications for other IR35 cases that pertain to freelancer workers in the media sector.

Fiona Coombe, Director of Legal and Regulatory Research, SIA, said, “In the words of the Tribunal Judge, this case was ‘finely balanced’. The Tribunal found, in fact, that two of the three elements of the test for employment status were found to be satisfied. There was a ‘significant’ right of control by the BBC over Ms Adams; and the extent of the mutuality of obligations to provide and perform work was ‘considerable’. However, these were outweighed by factors known to the parties when they entered into the contract which pointed towards self-employment. These included the fact that the time commitment allowed Ms Adams to work for other organisations for which her income was considerable. The fact the parties intended the relationship to be one of self-employment also played a part in the decision.”

According to reports, a spokesperson for HMRC said, “It is our duty to ensure everyone pays the right tax under the law, regardless of wealth or status. We are disappointed in the tribunal’s decision and will consider the judgment before deciding next steps.”

In an interview with The Telegraph (paywall), Adams said, “Cut to the most recent tribunal win – which cost another £75,000 – and it is three nil to me, yet HMRC still says it is ‘disappointed’ in the decision. Why is it disappointed? Three tribunals tasked with enforcing the rule of law agree that I am a self-employed person. Surely, HMRC should be delighted? Its job is to collect the ‘correct’ amount of tax, not extort as much as it possibly can get away with. I have been inundated by congratulatory messages from people in the media business I don’t even know.”

Dave Chaplin, CEO of IR35 tax advisory firm IR35 Shield, who has been supporting Ms Adams with her case since January 2019 and has assisted at all four hearings, said, "Kaye Adams is not a tax avoider; she is a victim of HMRC's intransigence and has been used as a pawn in HMRC's policy game to try and force media freelancers onto payroll. Regrettably, she has had to pay for HMRC's expensive strategy that was never really about her. The media sector should thank her for staying the course and not buckling under the immense pressure she endured from HMRC's litigators.

Chaplin added, “HMRC has 56 days to appeal, but after four hearings, I suggest it is time to concede and stop wasting taxpayers' money. The only next step HMRC needs to take is to apologise profusely for wrongly pursuing an innocent freelancer."

In a statement to ContractorCalculator, Adams said, “There are hundreds of thousands of self-employed freelancers like me in the country. If IR35 is deemed too problematic to apply, it is surely time for HMRC to work with our legislators to address the flaws rather than picking off decent, hard-working, law-abiding people one by one in the hope that others will buckle under the pressure."