Eamonn Holmes Next IR35 Target

Will Eamonn Holmes be the first of many ITV presenters to have their IR35 status challenged?

With the outcome of many BBC presenters’ IR35 cases still unresolved, it’s hard to know whether to despair of or admire the nerve of HMRC in its decision to investigate the IR35 status of ITV presenter, Eamonn Holmes.

Last week, the This Morning host revealed he is caught up in an IR35 battle which, according to reports, could cost him up to £2 million. Mr Holmes strongly refuted HMRC’s view that he has been wrongly operating outside IR35 on his ITV contract, and challenged the claim that he owes up to seven years of tax plus interest, telling the Daily Mail, “there is nobody more freelance than me.”

The presenter, who is thought to earn in the region of £700,000 a year for his work with ITV, had, at the time of writing, been waiting 17 weeks for the court to return with a verdict. Contractors who have endured an IR35 case themselves will know he may well be left waiting longer yet - such is HMRC’s haphazard approach to dealing with these matters.

Having spent “a lot of money” fighting HMRC, Mr Holmes has been critical of the Government’s attitude towards freelancers and contractors. He implied that independent workers are perceived as soft targets by HMRC and the ongoing witch-hunt against contractors is a result of ongoing economic uncertainty, stating “the country is broke and they are coming to get us.”

So, is the Eamonn Holmes investigation a sign of things to come? The TV personality certainly thinks so, and considers himself a “test case.” He is also of the opinion that should HMRC defeat him, the taxman will then challenge the IR35 status of other high profile ITV stars, including Ant and Dec, Phillip Schofield and Holly Willoughby.

This all feels quite familiar. HMRC’s tactics when first pursuing BBC presenters earlier this year was to focus on one high profile presenter. You might recall, Christa Ackroyd was the first and most notable scalp of HMRC’s IR35 campaign against The BBC. The taxman then reportedly turned its attention to around 100 other individuals.

Qdos Contractor CEO, Seb Maley, asks aptly ‘who next?’ Arguably, HMRC has never been more unpredictable than it is currently or desperate to win a high profile IR35 case, after registering just one victory this decade, which happened to be against Ms Ackroyd - a fairly cut and dried case by all accounts.

Contractors’ eyes are wide open. They see a Government implementing a short-sighted tax strategy, which in recent years has resulted in HMRC carrying out lengthy and in many cases - fruitless - IR35 enquiries.

If anything, the taxman’s ‘shoot first ask questions later’ policy highlights how important it is that contractors are confident they can put forward a cogent argument for belonging outside IR35, if questioned by HMRC or placed inside the rules by a public sector engager. Should further IR35 changes be announced in this month's Budget as speculated, the need for this becomes absolutely vital.

But HMRC’s often relentless and in many cases - aggressive - pursuit of contractors, not to mention its desire to make a very public example of high profile freelance presenters, is dangerous territory for the taxman to venture into.

This certainly was the case with BBC presenters, whose evidence given at the PAC committee in May of this year showed it was actually the broadcaster that ‘forced’ up to 100 individuals into working through their own limited companies or face having their contract cancelled.

With this in mind, should HMRC open enquiries into other ITV presenters - as Mr Holmes believes it will if victorious against him - the taxman must resist the urge to immediately point the finger of blame at the individuals.

The vast sums of money often reported in IR35 cases should not overshadow the fact there is a human cost to all of this too. And HMRC would be wise to take this into account. It’s common knowledge the IR35 enquiries carried out on BBC presenters apparently led to one presenter attempting suicide.

Whatever HMRC’s plan is, it’s vital it proceeds with caution and carefully assesses the unique aspects of all ITV presenters’ working arrangement. Grave mistakes could be made if the taxman takes the view that one presenters’ IR35 status sets a precedent for all others.

But has the taxman any intention of listening? Only time will tell...