Victory for Chiles against £1.7m tax bill

HMRC suffered a setback this week after a tax tribunal upheld an appeal by TV presenter Adrian Chiles’ company Basic Broadcasting Ltd against a combined income tax and national insurance bill of almost £1.7m.

Chiles is one of dozens of high-profile celebrities that HMRC have pursued recently over IR35 regulations which seek to uncover ‘disguised’ employees.  These are workers who pay corporate taxes, which are typically lower than income tax and national insurance contributions, by billing for their services via limited companies, despite effectively being full-time employees.   Happily for Chiles, the tribunal found that there was no suggestion that he had set out to avoid tax in this way.

Other stars who have faced investigation include Lorraine Kelly who recently won a case for a £1.2mn and Gary Lineker who is still battling with HMRC over a £4.9mn bill.

Tax expert Andrew Cross from Arcus commented that the complexity of IR35 rules could make it difficult for businesses and individuals to apply them correctly. He also said that the rules could cause a headache for employers, who last year became responsible for determining if the IR35 rules apply to freelancers they hire.

HMRC, who can appeal against the judgment, said it was analysing “the outcome of the tribunal before considering next steps”.