Lorraine Kelly plays the (self-employed) Entertainer

Under a decision published last month, TV personality and entertainer Lorraine Kelly (of the eponymous ITV morning show Lorraine) has won her appeal at the First Tier Tribunal (FTT) against a £1.2m tax assessment by HMRC.  

Kelly supplies her presenting services through a personal service company owned by her and her husband. HMRC asserted that for the period 2013/14 to 2015/16 the contracts under which Kelly presented Lorraine (and also for part of that time Daybreak) for ITV were subject to the intermediaries’ legislation, commonly known as IR35.

Why was IR35 an issue?

The aim of the IR35 legislation, as highlighted by the Tribunal, is to ensure that an individual cannot gain a tax advantage over an employee by providing services through a corporate structure. Where the legislation applies, any payments to the individual’s company are treated instead as deemed salary paid to an employee, on which Income Tax and NICs are due.

It was necessary to consider if IR35 applied as Kelly accepted that she was obliged to provide her services personally to ITV and that she was providing them through an intermediary – her personal service company. Where an individual works in that manner it is necessary to consider what the hypothetical contract between the client (ITV) and the worker (Kelly) would look like if the intermediary was not in place. If that hypothetical contract is considered to be a contract of service, instead of a contract for services, then IR35 applies. 

To determine the answer to this question it is necessary to consider a number of different factors including:

  • Mutuality of obligation – has the individual agreed to provide services in exchange for a wage or other remuneration and the engager agreed to provide work?
  • Control – an employee is generally subject to more control over how the service is carried out than a self-employed individual.
  • Business on their own account – if the individual can be considered to be in business on their own account, taking into consideration factors such as provision of equipment or other staff, financial risk, ability to profit from sound management and the degree of integration with the engager, then they are more likely to be self-employed and fall outside of the IR35 rules.

Ultimately, no single factor is determinative when deciding whether or not the individual is in business on their own account. The requirement is to stand back and paint a picture of the overall position before reaching a conclusion.

Name above the door

Kelly’s argument was that the nature and range of her work means that she is a self-employed star outside IR35. The Tribunal was shown examples of Kelly performing on Lorraine and Daybreak, including skits, comedy routines and wearing a bikini for a specific feature to demonstrate that she is not merely a presenter but really an entertainer.

HMRC sought to assert that ITV had control over Kelly as she is subject to certain broadcasting obligations. However, the Tribunal accepted that these applied to all individuals appearing on TV, whether employed or self-employed. The Tribunal accepted that Kelly had control over the running order of the show, the guests she interviewed and the duration of interviews. Evidence provided showed that Kelly was heavily involved in decisions taken over the show’s content and carried out all her own research on potential interviewees in her own time. The show had ‘her name above the door’ and thus had to be compatible with her values, which effectively gave her control over the output.

Kelly also highlighted the range of other work that she carried out, for example other TV work, advertising and newspaper columns. While the actual contract between her company and ITV suggested that she needed permission to carry out these other things, in practice Kelly considered that she informed ITV out of courtesy only and was not unduly fettered in her other activities. The fact that she could and did carry out additional work beyond the ITV contract pointed to self-employment.

In terms of financial risk, she ran the risk of the contract for Lorraine being terminated if ratings fell, or that the contract would not be renewed even if ratings were otherwise acceptable.

Kelly also argued that she was not integrated within ITV, and was not subject to ITV-employee specific rules or appraisals. She also maintained her own social media profile, separate to the Twitter account maintained by ITV for the Lorraine show.

ITV versus BBC

HMRC sought to draw a comparison between the Kelly case and the case last year of Christa Ackroyd, a BBC presenter who was held by the FTT to be within IR35 last year. (We have previously written about Ackroyd’s case here.)

Kelly was able to distinguish her case from Ackroyd’s on a number of features. In particular, while Kelly was only contracted for specific services to Lorraine and Daybreak, the BBC had much greater control over Ackroyd who could contractually be asked to do a range of work beyond presenting on Look North.


As a FTT decision, Kelly’s case is not binding but it will be of interest to a number of other stars as it is understood that a large number of celebrities who have worked through personal service companies are under enquiry by HMRC. The BBC is known to have engaged a number of celebrities in this manner in the past, and the practice at the time, and the BBC’s response to HMRC enquiries since, have been a matter of controversy.

Posted in: Employment