Very dangerous example set for contractors. Almost 20years since it was introduced ans still a legal minefield
if she was earning enough back then to owe that much in unpaid tax and she deliberately avoided it she deserves it, that goes for everybody
The government are currently having a hard time recruiting contractors due to the IR35 legislation. They either end up paying more to cover the extra tax losses for the contractor or have to word the contract so it doesn't fall into that category.
IR35 legislation dates from 1999 to try to ensure that employees didn't just cease employment on a Friday and commence as a personal service company on the following Monday. The main loss to the treasury being national insurance. The main problem with IR35 is that it leads from tax law into employment law the judgement being between contracts of service and contracts for services, the former being normally and indication of employment. In my opinion tax legislation needs to have certainty, be black and white not shades of grey. I feel it should also be considered that in the past many organisations would not engage employees but insisted on PSC as they avoided not just the NI cost but also employment rights. We avoid acting for personal service companies because of the lack of certainty.
I’d recommend all contractors register with IPSE who have successfully defended IR35 legal challenges to their members through the courts. It costs just short of 200 quid which is a small price to pay considering the legal costs at stake.
But she didnt deliberately avoid it. In fact its really the BBC who were encouraging its "employees" to be contracted so they avoided all the employers costs of National insurance - holiday pay etc in fact the judgement itself states '''' Ruling in favour of HMRC, the tribunal said: "We do not criticise Ms Ackroyd for not realising that IR35 legislation was engaged. "She took professional advice in relation to the contractual arrangements with the BBC and she was encouraged by the BBC to contract through a personal service company." '''' There is no question she deliberately tried to avoid paying tax - the problem is the tax law is so unclear and IR35 is a complete mess and there is no clear rule that defines whether someone is employed or contracting
As I have said before we all avoid tax and nothing wrong with that. Hands up whose bought something from Amazon Whose got an isa
It's stated that she was earning up to 200 grand a year. As an educated and intelligent person she must have realised that she wasn't paying that much tax on it. She was possibly paying the tax rate of an employee who would be getting paid 40-50 grand a year. I guess this is a case where the individual, their accountant, the bbc (she would have been getting further income from personal appearances etc too) and the laws and rules are all culpable.
I have to admit to some bias tbh couldn't stand the woman!! Although the principal is the same just because she took advice doesn't mean she didn't know what she was doing
Same here, not a fan. BUT, the tax figure quoted as £419k is misleading. That was her overall tax liability, for which a portion of it she has naturally paid anyway, so the actual figure is quite a bit less than this. However, it effectively ended her career, and from I can see, she was just simply unlucky as there are potentially 1000s of BBC and other employees who could face the same issue anyway. To have your career ended like this is not nice, and the reason she has fought this further was to simply clear her name in the public arena. For this, I do feel some sympathy towards her - never nice to see anyone forced out of a job.
She was hung out to dry by the BBC who dropped her pdq when HMRC started investigating her and yet, as was highlighted in the decision by the court yesterday, she was encouraged by the BBC to contract in this manner. Hope she sues the pants off the BBC.
Will she now be entitled to back pay of holiday entitlement and other usual benefits an employee of the BBC (or any other company) would be entitled to ?
