By Andrew Mitchell, Tax Partner, Armstrong Watson

What’s the difference between BBC and ITV?

No, it’s nothing to do with commercial advertising versus a licence fee but rather a story of two TV presenters in similar circumstances who came away from a Tax Tribunal with very different results.

Both Christa Ackroyd and Lorraine Kelly were anchors for TV programmes, for BBC’s Look North and ITV’s Lorraine respectively. Neither was classed for tax purposes as an employee of either the BBC or ITV and both operated through personal service companies set up by them to provide their services to the TV companies. Such an arrangement provided tax and national insurance contributions savings for both the BBC/ITV and the presenters, rather than being subject to PAYE.

HMRC will challenge such arrangements under the rules known as IR35 where they think the relationship is that of an employer and an employee, and consequently HMRC took both Ackroyd and Kelly to a Tax Tribunal.

At this point their paths differed. Christa Ackroyd was deemed to be an employee, landing her with a rather large tax bill, whilst Lorraine Kelly was considered not to be an employee of ITV. The reason for the differing conclusions was generally down to the level of control the TV companies exercised over the presenters.

It was found that the BBC directed and controlled Ms Ackroyd’s work and she did not have control over the content of Look North or her contribution to it. By contrast ITV were not considered to have sufficient control over Ms Kelly as she decided on the running order of the programme, the items to feature and the angle to take in interviews.

On such relatively small differences a large tax bill arose for one of the presenters. The lesson from these differing cases is that the area of employee status is a minefield and applies in many everyday scenarios where individuals provide their services outside of a formal employment, common examples being contractors, IT support and cleaners. In such scenarios professional advice should be sought before entering into such arrangements.

For help and support regarding your tax liabilities, please get in touch with Andrew Mitchell on 01756 620000 or email me at