Former BBC presenter Christa Ackroyd has lost her appeal against HM Revenue & Customs with the Upper Tribunal ruling that she must pay National Insurance Contributions and income tax on her earnings, as she was an employee not a contractor.

The income tax determinations totalled £419,151.

Last year the HMRC won a case against Ackroyd over her IR status.

Ackroyd was paid as a freelancer through a personal services company at the request of the corporation, but the HMRC ruled that she should have paid the same level of tax as a BBC employee. A tribunal then ruled Ackroyd would have to pay up more than £400,000.

The former presenter then lodged an appeal, and claimed she was a self-employed contractor, however the Upper Tribunal upheld the decision by the First Tier Tribunal.

The Upper Tribunal concluded that the First Tier Tribunal was correct in asserting an ultimate right of control over Ackroyd in the absence of any clear indicator within the contract, meaning she was an employee and not a contractor.

Ackroyd presented “Look North” on BBC 1 between 2001 and 2013. The appeal before the First Tier Tribunal related to a fixed term contract dated 4 May 2006 between the BBC and Ackroyd, which was terminated by the BBC in June 2013.

Ackroyd’s evidence was that she would never have entered into a contract with the BBC if it meant that the BBC would control the way in which she worked.

“However, we are concerned with the hypothetical contract,” the Tribunal stated. “At most this has only marginal relevance in a finely balanced case as a statement of intention.”

Ackroyd’s appeal was on the sole ground that the First Tier Tribunal erred in law in its conclusion that the BBC had sufficient control over her to mean that an employment relationship would have arisen if the services had been directly supplied.

In its decision, the Upper Tribunal stated, “The only issue in this appeal is whether the First Tier Tribunal erred in law in reaching the conclusion that under the hypothetical contract posited by section 49 the BBC had a sufficient degree of control over the provision of services by Ms Ackroyd to satisfy the control requirement necessary for an employment relationship. For the reasons given, we conclude that the First Tier Tribunal made no such error. The appeal is therefore dismissed.”

In reaction to the news that former BBC presenter, Christa Ackroyd, has lost her IR35 appeal, IR35 specialist, Qdos, responded to the outcome with Qdos CEO, Seb Maley commenting, “Given Ms Ackroyd was reportedly forced to work as a contractor by The BBC, this shouldn’t necessarily be considered a win for HMRC. 

“It’s not a typical IR35 case either, given contractors aren’t usually pushed into working arrangements purely for the benefit of the client, despite the emerging trend in the banking sector. That said, with IR35 reform approaching, Ms Ackroyd’s case does highlight the dangers of a business handing contractors’ ultimatums. Very often, this approach will result in non-compliance or a contractor walkout.”

Dave Chaplin, CEO of ContractorCalculator, also commented, “What’s really frustrating about these cases is that they are based on the pre-reformed Off-Payroll rules. This means that the freelancer, in this case Ackroyd, is deemed liable for employer’s National Insurance (NI) which under the Off-Payroll rules would rightfully be paid by the BBC. Had Ackroyd’s status been assessed under these the new rules, she would not have an extra tax bill, and it would be the BBC picking up the bill for the perceived avoidance of the employment taxes.”