TV presenter Adrian Chiles is facing a £1.7 million tax bill after losing his appeal against HM Revenue & Customs (HMRC) over his tax status during his tenure at ITV and the BBC.
Mr Chiles, married to Guardian editor Katharine Viner, has been embroiled in a decade-long legal battle with the tax authorities over whether he should be classified as an employee or freelancer during his broadcast years. Despite initially winning the case in February 2022, HMRC successfully appealed to the Upper-Tier Tribunal, which ruled on 7 June 2024 that “legal errors” had affected the judgment. The case now returns to the First-Tier Tribunal.
HMRC states that Mr Chiles was not a freelancer when he worked for the BBC and ITV between 2012 and 2017 and should have paid tax as an employee. This is despite operating as a contractor through his limited company, Basic Broadcasting Ltd (BBL), since 1996. If Mr Chiles loses, he will owe £1.2 million in income taxes and almost £500,000 in National Insurance Contributions (NICs).
This dispute is part of a wider crackdown by HMRC against taxpayers believed to be 'disguised employees', who are allegedly reducing their tax liabilities by channeling income through personal service businesses. High-profile presenters such as Kaye Adams and Gary Lineker have had similar battles with HMRC under the controversial IR35 rules.
The IR35 rules determine a worker's employment status for tax purposes, with contractors outside IR35 paying lower national insurance rates. Mr Lineker recently won his tax battle with HMRC, avoiding almost £5 million in claims under the same legislation, while Ms Adams also emerged victorious in a dispute over her earnings as a BBC presenter, worth £ 124,000 in income tax and NICs.
Ms Adams expressed her dismay, saying: “I am shocked that HMRC have once again decided to twist the knife on a fellow freelancer. For ten long years, Adrian has done everything and more that was required of him in presenting the facts of his case to the tribunal system.”
RSM accountant Susan Ball highlighted the complexity of employment tax rules, noting: “The key question is whether the relationship resembles an employment relationship. If so, tax must be deducted according to these rules. But you're asking individuals to navigate these complexities on their own, and even judges aren't always sure about that.”
The tax authorities have faced significant criticism over the treatment of taxpayers who do not follow the complex rules. Qdos, an IR35 compliance expert, has raised concerns about the handling of Mr Chiles' case, pointing to a systematic bias against taxpayers. Seb Maley, CEO of Qdos, commented: “We see this time and time again. A freelancer only proves his innocence before HMRC can appeal and have a new hearing. This speaks volumes about a system where the odds are stacked against taxpayers.”
Chiles must now prepare for another hearing at the First Tier Tribunal, where he will once again have to prove his self-employed status or face a significant financial penalty. This lengthy ordeal underlines the controversial and often complicated nature of IR35 legislation and its impact on freelancers across sectors.
