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The changes that have affected the public sector bodies engaging contractors through intermediaries are being extended to the private sector from April 2020. From that date it will be the engager rather then the contractor who is responsible for deciding whether or not the engagement is within IR35.
Tribunal
Ahead of the changes, review clients’ existing arrangements to ensure their income is being treated correctly. After April 2020, it is they who will be exposed to penalties for not operating the rules correctly. One of the key considerations is how much control the contractor has over the work they perform. This was examined in detail in the First-tier Tribunal case Albatel Ltd v HMRC (2019).
Decision
The case involved the provision of the services of Lorraine Kelly by the company to ITV. Kelly exercised considerable control over her working hours and the structure and content of her shows. HMRC had tried to argue that the control lay with ITV. Inevitably, conclusions have been made with the 2017 case of Christa Ackroyd, in which HMRC was successful in asserting that the presenter was an employee in all but name. However, the control issue appears to be the main distinguishing factor and this was drawn upon by counsel for Kelly.
In the previous case the broadcaster was able to direct the presenter as to what programmes she was to present and there was little or no input to the structure or content of those programmes as there was with Kelly. If your clients have a similar level of autonomy and control, they could use this case to back up their argument that their engagement is outside of IR35 though of course this must reflect the reality of the relationship, not just the paper contact.
