Paya Ltd and Others
| Jurisdiction | UK Non-devolved |
| Judgment Date | 17 September 2019 |
| Neutral Citation | [2019] UKFTT 583 (TC) |
| Date | 17 September 2019 |
| Court | First Tier Tribunal (Tax Chamber) |
[2019] UKFTT 583 (TC)
Judge Harriet Morgan, Member Mr Andrew Perrin
Mr Jonathan Peacock QC, Ms Marika Lemos and Ms Georgia Hicks, counsel, instructed by RadcliffesLeBrasseur, appeared for the appellants
Mr Adam Tolley QC and Mr Christopher Stone, counsel, instructed by the General Counsel and Solicitor to HM Revenue and Customs, appeared for the respondents
Income tax and National insurance contributions – IR35 determinations – Whether determinations valid – Whether determinations in time.
The First-tier Tribunal very largely dismissed the taxpayer companies' appeals against determinations under the IR35 legislation: there was sufficient mutuality and at least a sufficient framework of control to place the assumed (direct) relationships between the BBC and the programme presenters as one of employment rather than self-employment.
Three BBC presenters (“G”, “W” and “E”) each operated personal services companies (“PSCs”), providing their respective services to the BBC. The PSCs were set up during 2003 and 2004. Each of the Presenters had worked for the BBC for a number of years previously: G and W on a “freelance” basis from 1999 and 2001 respectively; whilst E had been a BBC employee for some 16 years until he took voluntary redundancy in 2003 (at that time he also started to build up a portfolio of work outside the BBC, and also had a few radio presenting shifts at the BBC World Service on an ad hoc, freelance basis).
In the period from their establishment until 2014, the PSCs entered into a series of contracts with the BBC for the provision of the relevant Presenter's services to the BBC News channel (“News”) and/or the BBC World channel (“World”). News and World provided live coverage of news events in the UK and around the world. During this period:
- G mainly presented on News but she also presented news bulletins on BBC1 and BBC2 as well as on World and BBC London;
- W worked primarily on News but also on World, in each case as a fill-in presenter with no regular slot;
- E presented on World. He also presented a number of programmes on BBC Radio but income received by E's PSC in respect of his radio presenting work was not the subject of the appeal.
The Presenters all did some other non-BBC work although not as news presenters and to varying degrees.
In 2014 the Presenters were all engaged directly by the BBC under continuing contracts, which the BBC treated as employment contracts for tax purposes.
Each BBC-PSC contract was usually stated to commence on the expiry of the previous contract although in some cases there was a gap between expiry of one and signing or agreement of the new contract. The Presenters continued to present on World or News as applicable whilst negotiations were on-going for a new contract. The Presenters all stressed that they never felt there was any guarantee of the obtaining a new contract at the expiry of the existing one.
The contractual arrangements broadly involved a mix of one or two year contracts for a minimum number of days (of around 150 to 190 days a year), in return for a fixed fee per annum, with provision for additional fees for additional programmes or for additional days.
In the case of W, the contractual arrangements as regards World also included 2 one-year contracts which simply specified a daily rate but no minimum number of days.
Generally too, it was stipulated that the BBC had first call on the Presenters' services during any “call day”, but acknowledged that as a freelance they were free to pursue other engagements for third parties (including during any call day), subject to this not conflicting with any scheduled BBC commitments.
Presenters received no benefits such as paid holiday, sick leave, maternity leave or a pension.
The contractual terms also contained a warranty by the PSC that it controlled the services of the Presenter and agreed to place the same at the service of the BBC in accordance with the requirements of the relevant contract.
Work rotas were managed by a member of the BBC staff who emailed or called the Presenter to ask him or her to work on a specific day or days. The list was usually provided around one month or several weeks ahead of the relevant dates. The Presenters said they were free to say “no” to a particular day or days, and from time to time did so. Generally though, Presenters wanted more shifts than the BBC could offer, or in one case considered that, in a competitive industry, there was value in being seen to be available at all times.
The income in dispute was generated from the Presenters' roles in presenting on the News channel, in the case of G and W, and on the World channel, in the case of W and E. In each case, typically on a three hour shift or slot in the studio, the Presenters presented news reports and live news coverage of breaking news around the world and/or in the UK which included conducting live unscripted interviews. The interviews comprised at least half of a typical broadcast on News. Each of the Presenters also presented for News and/or World from locations outside the studio in the UK and overseas, which they described as “field work”.
Whether working on News or World the Presenters worked as part of a team which included a director, producer and editors some of whom spoke to them from the gallery via earpieces during the live broadcast. The team in the gallery also included the operational personnel who were responsible for the right pictures going on air, the quality of the visuals and sound and the overall look of the studio. It was the senior producer (or assistant editor) who essentially managed the overall output of the programmes, which included managing the team members including the Presenter; he or she crafted the “editorial direction” of the show, in the sense of directing more junior members of staff in relation to their editorial judgments, making decisions on which guests to interview and what stories to run and in what order. He or she also approved the broad direction of interviews and timed the programme.
However, in the fast-moving world of breaking news, updating stories, ad libs and unexpected interviews, the Presenter had control over what was said. Within the team, the Presenter was often the most experienced journalist. Presenters took on a large degree of responsibility; they were expected to ad lib when they thought it necessary or appropriate, and the editor could not “control” that. G's evidence was that in some cases there would be no editorial meeting before or after the broadcast; in her experience, such team meetings as there were tended to be about logistics in terms of what stories were to be covered and in what order, rather than the editorial focus of, for example, the interviews.
W typically arrived at the studio some hours in advance, having started his day with a few hours of his own research at home, listening to the radio, checking the online news and the international press. On arriving at the newsroom, he attended a meeting with the team of gallery staff, the strand editor, producers and broadcasters, after which he spent around one and a half hours doing more research.
Presenters sometimes received a brief before an interview, prepared by the producer who set up the interview, which principally outlined the stance that the interviewee was likely to take. The brief sometimes included questions for the interviewer to ask but the Presenters regarded them as suggestions only. W gave evidence that in interviews “there is total editorial freedom about what I ask” because he was “hired as a professional journalist and interviewer”.
Presenters all read from an autocue or script to some extent. The extent this was required varied from day to day depending on the extent there was breaking news and live interviews. G said that on a quiet news day most of the programme revolved around her presenting scripted introductions into recorded reports. If there was a major breaking news story, however, no autocue was used.
As regards field trips, W said there was no autocue and no information other than what he had researched before he left and gleaned on the ground. He liked the freedom this gave him although it was much more difficult than studio work. He loved having to think on his feet, react to the situation and often source all of his own information.
The BBC's evidence included that its Editorial Guidelines applied to “everyone who contributes to BBC output. They apply to all the people who are employed by the BBC, be they casual, freelance, staff or indeed, to any independent producer who makes output for the BBC”. Editorial responsibility within the BBC rested with the editorial chain of management or command which ran from “programme or content producers (including in-house or independent), presenters, editors, heads of department, divisional directors, and up to the Director General, who is the editor-in-chief and therefore has ultimate editorial responsibility for the BBC's content”. The Guidelines did not prescribe what output was made but provided a point of reference for the considerations to be borne in mind as to how the output should be produced in a way that accorded with BBC values.
The Guidelines were not, therefore, generally prescriptive; when applying them, individual producers or presenters were expected to make necessary judgments in many areas. If the issue was particularly difficult, the person could contact others such as the editorial policy team or particular experts within the BBC for guidance but that team's capacity was limited and decisions often had to be made instantly.
G's evidence was that as a freelance, she was being treated differently to staff. She did not know if the next contract would be agreed; there was no guarantee. She had pay cuts, no pension and had three children with no maternity leave. Other...
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