Being in business on your own account: what the Kaye Adams case means for contractors and IR35
In February, TV and radio presenter Kaye Adams won a landmark case against HMRC which found her outside IR35 due to being ‘in business on her own account’.
The case: HMRC v Atholl House Productions
Kaye Adams was being pursued by HMRC, who claimed she owed an outstanding tax bill of £140k for the tax years 2015/16 and 2016/17. Adams provided her media services via a PSC, Atholl House Productions; during this period she presented the Kaye Adams programme on the BBC, in addition to writing for multiple newspapers and presenting Loose Women. HMRC argued she was a BBC employee and not a freelancer, and should have been operating inside IR35.
However, the Upper Tier tribunal upheld a 2019 decision by the First Tier tribunal which found Adams outside IR35 due to her 20 years’ industry experience as a freelancer and being in business on her own account.
In business on your own account
Being ‘in business on your own account’ means you view your company and act in such a way that you are truly in business – and are not just using your company as a means to an end to get paid.
Simple business activities, such as the following, all show this:
- Running your company as a business owner
- Company naming and branding
- Having multiple concurrent clients
- Investing in training, new hardware
- Business website and social media presence
inniAccounts CEO James Poyser shares his thoughts on why this case is significant for consultants and contractors:
“When it comes to assessing IR35 status, being in business on your own account can have an impact on your status. And for Kaye it was this secondary factor that convinced the judge she was outside IR35, even though she was subject to control and providing a personal service”.
What does this mean to consultants and contractors?
“For those early on in their independent careers, it means very little. However for those with established businesses, with an established business mindset and processes, it’s clear that this should be taken into account when determining your status.”
What does this mean to end clients?
This case proves the importance of undertaking individual IR35 determinations, and involving the consultant or contractor in that process.
“IR35 status is the intersection of a contract, working practices and how the contractor runs their business. You will only be able to establish the contractor’s business arrangements by asking them.”
Explore our resources on being in business on your own account and guidance on what you can do to prove this.