In 2022, attention was drawn back to IR35 following chancellor Kwasi Kwarteng’s short-lived proposal to abolish the regime altogether. Chancellor Jeremy Hunt’s U-turn less than a month later, however, restored IR35 to where it was in 2021, with the onus of completing the employment status assessment (generally) remaining with the end client.
Tribunal approach
Since IR35’s inception, we have not seen many cases reach the courts (especially post-2021), but the cases that have been heard clearly demonstrate the nuanced nature of the legislation. The Lorraine Kelly and Eamonn Holmes cases are prime examples of this.
There are clear parallels to the activities of Kelly and Holmes, both presenters for ITV. However, following judgments at the First Tier Tribunal (and subsequently the Upper Tribunal in Holmes’s case), Kelly was held to have retained sufficient control over her presenting activities to be judged as “self-employed”, whereas Holmes was regarded as under the control of ITV and thus treated as “employed”.
What has created particular confusion is that the two cases reached opposing conclusions by reference to one specific body, over whom Kelly, Holmes and ITV arguably had no form of control: Ofcom.
For Kelly, it was decided that it was “ultimately a matter for [her] if she acted in a manner which breached Ofcom”, despite there being an obligation to comply with regulatory standards in her contract. In contrast, for Holmes, the judge ruled that ITV had sufficient control, in part, because “the obligation to comply with [Ofcom] was made a contractual requirement” — that is, it was in his contract.
Given that, in both cases, compliance with Ofcom was a contractual requirement, it may be queried why two different judgments were reached.
In some instances, cases may not even turn on the substance of employment status, but rather on subtle technicalities. For example, the case of Gary Lineker was presented as a case on employment status, but it was decided on contract law.
In his role as a partner of GLM Partnership, Lineker signed contracts with the BBC and BT Sport personally. The judge found that because each partner acts as “both principal and as agent”, the contracts Lineker signed were considered “direct contracts” between him (rather than his intermediary) and the client, and therefore IR35 did not apply.
To further confound the situation, the judge suggested the decision would have been different if Lineker’s then-wife and fellow partner of GLM had signed the contracts instead.
