Inside vs outside IR35? Courts finally reached a verdict for Adrian Chiles (Match of the Day, The One Show) after seven years. What can his case teach us?
(3 minute read)
Today’s tax tip explains:
- What Adrian Chiles’ case was about
- How the court decided the outcome
- Understanding if you’re inside vs outside IR35
Well-known TV personality Adrian Chiles has been in a tax dispute with HMRC for seven years.
The dispute centres around the question: was Chiles working inside vs outside IR35 when providing services to the BBC and ITV?
Chiles claimed he worked outside IR35 because he offered his services via his personal company as a contractor. HMRC, on the other hand, insisted he was employed by the BBC and ITV.
With £1.7 million in tax and National Insurance at stake, the results could’ve been costly.
The case crawled on for seven years with the First Tier Tribunal only recently reaching a verdict.
Inside vs Outside IR35
The court ruled in Chiles’ favour.
Although some features of Chiles’ relationships with the BBC and ITV suggested a contract of employment (the broadcasters had control over him and there was sufficient mutuality of obligation), these were outweighed.
The case hinged on evidence that Chiles was in business on his own account.
His company, Basic Broadcasting Limited (BBL), employed an Agent and Personal Assistant to market Chiles. He provided services to other businesses through BBL whilst working for the BBC and ITV. Additionally, he provided his own equipment to clients (an earpiece).
Taken together, the court judged that Chiles was in business on his own account and worked outside IR35.
Adrian Chiles HMRC: What we can Learn from Chiles’ Case
Contractors often see control and mutuality of obligation as the most significant factor determining IR35 status. However, in this case, the court ruled in favour of Chiles despite these factors working against him.
This case shows how the principle of being in business on one’s own account can be hugely influential in determining if your inside vs outside IR35.
It’s also a stark reminder of how unclear IR35 can be and how costly small mistakes in drawing up contracts can be. If you’re working outside IR35 you should always keep these factors in mind when setting out the terms of contracts.
Kind regards Ilyas