Have you ever been in a situation where you have to argue that you’re two distinctly separate entities? We imagine most of you have not – it’s not exactly a normal occurrence. However, that’s the argument that was successfully used by presenter Lorraine Kelly to reduce her tax bill.
When Ms. Kelly was presented with a £1.2m tax and national insurance bill as part of an HMRC crackdown on broadcasters, she took HMRC to court to argue against it. Her lawyers argued that Ms. Kelly presents a “persona of herself” when appearing on her show, which is completely distinct from her normal personality. As such, she should be regarded as an actor, which makes various expenses tax-deductible and would have reduced the bill she received. The tribunal agreed with her, and the bill was cancelled.
The case is one of a number of high-profile IR35-related cases that HMRC has lost since the introduction of the controversial law relating to payroll and contract classifications. This begets a serious question: are situations like this merely people doing everything they can to avoid paying taxes, or is HMRC fundamentally misunderstanding its own laws?
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