TV presenter Adrian Chiles is facing a £1.7m tax bill following the loss of his appeal against HM Revenue & Customs (HMRC) concerning his tax status during his tenure at ITV and the BBC.
Mr Chiles, married to Guardian editor Katharine Viner, has been embroiled in a decade-long legal battle with the tax authority over whether he should be classified as an employee or freelancer during his broadcasting years. Despite initially winning the case in February 2022, HMRC successfully appealed to the Upper-Tier Tribunal, which ruled on 7 June 2024 that “errors of law” influenced the judgement. The case now returns to the First-Tier Tribunal.
HMRC contends that Mr Chiles was not a freelancer when working for the BBC and ITV between 2012 and 2017 and should have paid tax as an employee. This is despite his operation as a contractor through his limited company, Basic Broadcasting Ltd (BBL), since 1996. If Mr Chiles loses, he will owe £1.2m in income taxes and nearly £500,000 in National Insurance Contributions (NICs).
This dispute is part of a broader HMRC crackdown on taxpayers believed to be “disguised employees,” allegedly reducing their tax liabilities by funnelling income through personal service companies. High-profile presenters like Kaye Adams and Gary Lineker have faced similar battles with HMRC under the controversial IR35 rules.
The IR35 rules determine a worker’s employment status for tax purposes, with contractors outside IR35 paying lower National Insurance rates. Mr Lineker recently won his tax battle with HMRC, avoiding nearly £5m in claims under the same legislation, while Ms Adams also emerged victorious in a dispute over her earnings as a BBC presenter, worth £124,000 in income tax and NICs.
Ms Adams expressed her dismay, stating, “I am appalled that HMRC has once again decided to twist the knife into a fellow freelancer. Over ten long years, Adrian has done everything and more that has been required of him by presenting the facts of his case to the tribunal system.”
Accounting expert Susan Ball from RSM highlighted the complexity of the employment tax rules, noting, “The key question is whether the relationship resembles an employment relationship. If so, tax must be deducted under these rules. But you’re asking individuals to navigate these complexities themselves, and even judges aren’t always certain.”
The tax office has faced significant criticism over its treatment of taxpayers who fall foul of its intricate rules. Qdos, an IR35 compliance expert, has voiced concerns over the handling of Mr Chiles’ case, pointing to a systemic bias against taxpayers. Qdos CEO Seb Maley commented, “We see this time and time again. A freelancer proves their innocence only for HMRC to appeal and be granted another hearing. This speaks volumes of a system with odds stacked against taxpayers.”
Mr Chiles must now prepare for another First-Tier Tribunal hearing, where he must again prove his self-employed status or face a substantial financial penalty. This prolonged ordeal underscores the contentious and often convoluted nature of IR35 legislation and its impact on freelancers across various industries.