One of our team here at stevensdrake saw an interesting article on the BBC website recently (https://www.bbc.co.uk/news/entertainment-arts-47648053). It relates to the employment status of Lorraine Kelly. It’s worth reading, as it provides an interesting perspective on the challenge of correctly categorising different types of ‘workers’.
Employed or self-employed?
Whilst we as employment lawyers are normally more concerned with people’s ‘status’ from the point of view of employment rights, we have to keep an eye on the tax implications as well.
Ms Kelly apparently provides her presenting services to ITV via a company of which both she and her husband are directors. The company is paid for her services and she presumably then draws an income from the company through a combination of salary and dividends, having previously offset any appropriate business expenses.
HMRC sought to argue that Ms Kelly is actually an employee of ITV and ought to pay tax accordingly. All in all, HMRC claimed that Ms Kelly owed the taxman over £1m in tax and NI.
When the case recently went to a tax tribunal, the judge found in Ms Kelly’s favour. Having heard that she apparently sets her own hours, controls the content of her show and doesn’t receive sick pay or pension benefits, the tax judge was prepared to accept that she is not employed by ITV and has paid the right amount of tax.
The employment and tax status of televisions presenters such as Lorraine Kelly has been a contentious issue for quite a few years now. Nevertheless, in this case, the judge appears to have been convinced by the argument that ITV is buying the product or the brand that is ‘Lorraine Kelly’, rather than engaging Ms Kelly herself as an employee. Apparently, her local tax office is unconvinced and is currently considering appealing.
Let’s see what happens next!