05 November 2021
A former Sky TV presenter did not appeal his IR35 case to the lower court, over work done for Sky TV by his limited company.
The case of Clark’s limited liability company Little Piece of Paradise Limited was heard in tax court last year but was finally published recently. The trial court ruled that the contracts between Little Piece of Paradise and Sky, from 2013 to 2018, each resembled an internal IR35 contract.
The tribunal held that personal service was required and that there was reciprocity of obligation and control to a sufficient degree for the engagement to be a contract of service.
Clark is expected to reimburse HMRC for the missing income tax and national insurance contributions for the period in question. The case carries £ 281,084.48 of tax payable and concerns the five tax years 2013 to 2018.
Dave Chaplin, CEO of IR35 Shield Compliance Solution, who attended the hearing, said: “Much of the hypothetical contract that was formed was based on terms implicitly derived from statements made by witnesses during the counter. -interrogation during the hearing.
“A lot of the contracts of these media presenters seem to be boilerplate, with additional deals being made verbally. It can be a huge challenge many years down the road to try to make a case – memory fades faster than ink, ”said Chaplin. “What’s also quite unfair is that if Mr. Clark’s arrangements fell under the new IR35 rules, and not the old ones, the broadcaster would foot the tax bill, and no him.
“While the amount here is quite large (£ 281,084.48), as usual in most cases, the final amount owed tends to be around a third of that figure, as his company would have already paid. a considerable amount of taxes, including VAT of around £ 56,000 – which is rarely mentioned in these cases, “Chaplin added.” A final point of course is that if Mr Clark had been a a full-time Sky employee, it is likely that he would have been paid considerably less as a salary, and therefore did not generate as much tax as under the arrangement. ”
Seb Maley, CEO of IR35 specialist Qdos, said: “The constant flow of IR35 courts recently shows that IR35 is a priority for HMRC, which is now on a mission to prosecute not only entrepreneurs but businesses as well. for mind-boggling tax bills. Dave Clark is another victim of the complex IR35 legislation.
“A high-profile victory for HMRC may be for entrepreneurs and businesses, but the point is that Clark’s working relationship with Sky, like many other presenters, was quite different from that held by typical entrepreneurs. It’s also possible that Clark will appeal the case again and overturn that decision, ”Maley added.
“In the end, the judge was of the opinion that Clark was under the control of Sky, who also paid him whether he worked or not. Moreover, he was not allowed to present for other companies. , which the judge said paints a picture of employment rather than self-employment. But I repeat, this is certainly not the case in all areas, “Maley continued.
In its decision, the Tribunal stated: “We are satisfied that there were no factors inconsistent with the affirmative finding that the contractual arrangements between Sky and Mr. Clark
have been on a service contract for the duration of the entire relevant period from 1 August
2012 to July 31, 2018 for the purposes of IR35 legislation.