Breakfast TV presenter Lorraine Kelly appears on a morning show as a character rather than appearing as herself a tribunal has ruled, in a distinction which will save her £1.2 million in tax.
The decision was handed down to Kelly, who presents the ITV show Lorraine, in a dispute over a bill for £900,000 in income tax and £300,000 in national insurance contributions over a four year period.
But because she is acting on camera rather than appearing as herself, judge Jennifer Dean ruled that she was able to justify the cost of an agent as a deductible expense.
Kelly effectively played the role ‘of a friendly, chatty and fun personality’ on television the tribunal found, and ‘presents a persona of herself’.
‘We should make clear we do not doubt that Ms Kelly is an entertaining lady, but the point is that for the time Ms Kelly is contracted to perform live on air she is public “Lorraine Kelly”; she may not like the guest she interviews, she may not like the food she eats, she may not like the film she viewed but that is where the performance lies.’
The case was one of a series launched by HMRC against TV stars who were encouraged to incorporate and opt to receive remuneration as a contractor rather than employee, effectively lowering their tax liabilities.
It has argued that the presenters are effectively employees, and should be subject to income tax and national insurance contributions, and successfully prosecuted the presenter of the BBC’s Look North Christina Ackroyd last year.
A HMRC spokesperson said: ‘We are disappointed that the first tier tribunal has decided that the intermediary rules (also known as IR35) did not apply in this case. We will carefully consider the outcome of the tribunal before deciding whether to appeal.’
Kelly argued that she did not receive the benefits of an employee such as sick pay and holiday time, however. She also pointed out that she set her own working hours for ITV and was able to prioritise other commitments when ITV had requested she work outside these set times.
The contract with ITV related to work on morning show Daybreak between 2012 and 2014 and her eponymous TV show between then and when HMRC presented her with the bill in 2016.