Lorraine Kelly has won an appeal against HM Revenue & Customs (HMRC) at a First Tier Tribunal (FTT) following a £1.2 million demand for unpaid income
tax and National Insurance Contributions (NICs).
HMRC claimed that Lorraine Kelly should have been working inside the rules of IR35 at ITV Breakfast Ltd during the relevant period.
This would have meant she was effectively an employee of ITV and income tax and NICs should have been paid.
HMRC accepted that Kelly’s other assignments charged through her limited company were outside of IR35.
Kelly appealed on the basis that the nature and range of her work meant all her assignments should be treated as outside of IR35.
Kelly argued that she did not receive sick pay or a pension, she chose her own hours and ultimately there was no guarantee her contracts would be renewed.
Although the ITV programmes were aired throughout the year, Kelly was only required to provide her services for 42 weeks each year.
She also played an ‘instrumental’ role in helping find substitute presenters for the time she was absent.
ITV was not obligated to pay Kelly if she was unable to present the show and additional appearances on ITV would be negotiated under separate contracts.
HMRC argued that ITV retained control over Kelly due to OFCOM obligations and that it was the editor of the programmes who exercised that control. However,
the tribunal found that OFCOM’s role as a regulator was irrelevant and there was minimal control or supervision of Kelly by the editors.
After examining all the evidence, the tribunal decided that the relationship between Kelly and ITV was a contract for services and not that of employer
and employee and found in her favour.
The FTT also contested whether Kelly was a ‘theatrical artist’; as if she were treated as an entertainer her limited company would be able to deduct her
agent’s fees from its income. HMRC claimed she was a current affairs journalist.
Ms Kelly stated that she viewed the term “theatrical artist” widely and that she acted every day as a version of herself and was not reliant on ITV for
The judge found Kelly’s ITV contract was outside of the rules of IR35 and the deduction of agent’s fees didn’t have to be resolved.
A spokesperson for HMRC said: “We are disappointed that the FTT has decided that the intermediary rules (also known as IR35) did not apply in this case.
Moving forward, we will carefully consider the outcome of the tribunal before deciding whether to appeal.”