In Christa Ackroyd Media v HMRC [2019] UKUT 326 (25 October 2019), the UT found that a TV presenter would have been an employee under the ‘hypothetical contract’ (ITEPA 2003 s 49).
Ms Ackroyd was a television journalist who had been engaged in a variety of media roles since the 1970s. She had worked at the BBC under two fixed term contracts between the BBC and her company CAM. It was accepted that CAM was a ‘personal service company’ and HMRC contended that under the intermediaries legislation, Ms Ackroyd’s status was that of an employee so that CAM should account for income tax and NICs. HMRC had issued determinations and imposed penalties on that basis. Ms Ackroyd considered that she was a self-employed contractor.
The first condition for the existence of an employment relationship (as set out in Ready Mixed Concrete [1968] 2 QB 497), mutuality of obligation, had been established by the FTT. Similarly, the third condition was met as the FTT had found that overall ‘the other provisions of the hypothetical contract were largely consistent with employment status’. The only issue was therefore whether the BBC had sufficient control of Ms Ackroyd to establish an employment relationship.
The UT considered that the tribunal should ask itself the question: ‘In so far as the contract does not deal explicitly with all aspects of control, is it appropriate in view of the contract, and the wider context, to conclude that ultimate control in relation to Ms Ackroyd’s services lay with the BBC?’ The UT therefore considered that the FTT had made an error of law when considering whether ‘a right of ultimate control’ was an implied term of the contract. This was not the right test. However, the FTT’s conclusions in relation to control had been relevant to a ‘broader process of construing the contract and the context in order to determine the extent of the BBC’s control over the “what, how, where and when” in relation to Ms Ackroyd’s services’. Consequently, the FTT had taken the wrong approach but it had reached the correct conclusion.
The UT also rejected a distinction between input and output; it would be ‘highly artificial’ to distinguish between the work and the finished product (usually an episode of Look North). Similarly, the UT observed that the wording of s 49 did not require a consideration of the subjective intentions of the parties but rather, consideration of the terms on which the services were provided. The most important issue was therefore not whether the BBC would in practice control Ms Ackroyd, but whether it could do so.
The UT found that the context suggested that the BBC, through the editor, would have control over content, given the BBC’s editorial responsibility. This was also consistent with the BBC’s Editorial Guidelines. In this respect, the UT agreed with the FTT’s conclusion that ‘it did not matter that Ms Ackroyd was not contractually bound by the Editorial Guidelines because both parties understood that the BBC could enforce those Guidelines if necessary’.
Why it matters: There have now been several decisions on the application of the intermediaries legislation to media presenters and some have reached opposite conclusions. It was tempting to explain these divergences by reference to key factors such as obligatory compliance with editorial guidelines or length of contract. This decision suggests that the overall context is relevant when ascertaining control.
In Christa Ackroyd Media v HMRC [2019] UKUT 326 (25 October 2019), the UT found that a TV presenter would have been an employee under the ‘hypothetical contract’ (ITEPA 2003 s 49).
Ms Ackroyd was a television journalist who had been engaged in a variety of media roles since the 1970s. She had worked at the BBC under two fixed term contracts between the BBC and her company CAM. It was accepted that CAM was a ‘personal service company’ and HMRC contended that under the intermediaries legislation, Ms Ackroyd’s status was that of an employee so that CAM should account for income tax and NICs. HMRC had issued determinations and imposed penalties on that basis. Ms Ackroyd considered that she was a self-employed contractor.
The first condition for the existence of an employment relationship (as set out in Ready Mixed Concrete [1968] 2 QB 497), mutuality of obligation, had been established by the FTT. Similarly, the third condition was met as the FTT had found that overall ‘the other provisions of the hypothetical contract were largely consistent with employment status’. The only issue was therefore whether the BBC had sufficient control of Ms Ackroyd to establish an employment relationship.
The UT considered that the tribunal should ask itself the question: ‘In so far as the contract does not deal explicitly with all aspects of control, is it appropriate in view of the contract, and the wider context, to conclude that ultimate control in relation to Ms Ackroyd’s services lay with the BBC?’ The UT therefore considered that the FTT had made an error of law when considering whether ‘a right of ultimate control’ was an implied term of the contract. This was not the right test. However, the FTT’s conclusions in relation to control had been relevant to a ‘broader process of construing the contract and the context in order to determine the extent of the BBC’s control over the “what, how, where and when” in relation to Ms Ackroyd’s services’. Consequently, the FTT had taken the wrong approach but it had reached the correct conclusion.
The UT also rejected a distinction between input and output; it would be ‘highly artificial’ to distinguish between the work and the finished product (usually an episode of Look North). Similarly, the UT observed that the wording of s 49 did not require a consideration of the subjective intentions of the parties but rather, consideration of the terms on which the services were provided. The most important issue was therefore not whether the BBC would in practice control Ms Ackroyd, but whether it could do so.
The UT found that the context suggested that the BBC, through the editor, would have control over content, given the BBC’s editorial responsibility. This was also consistent with the BBC’s Editorial Guidelines. In this respect, the UT agreed with the FTT’s conclusion that ‘it did not matter that Ms Ackroyd was not contractually bound by the Editorial Guidelines because both parties understood that the BBC could enforce those Guidelines if necessary’.
Why it matters: There have now been several decisions on the application of the intermediaries legislation to media presenters and some have reached opposite conclusions. It was tempting to explain these divergences by reference to key factors such as obligatory compliance with editorial guidelines or length of contract. This decision suggests that the overall context is relevant when ascertaining control.
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