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You are here: BAILII >> Databases >> First-tier Tribunal (Tax) >> Christa Ackroyd Media Ltd v Revenue and Customs (INCOME TAX/CORPORATION TAX : Personal service companies (IR 35)) [2018] UKFTT 69 (TC) (10 February 2018) URL: http://www.bailii.org/uk/cases/UKFTT/TC/2018/TC06334.html Cite as: [2018] UKFTT 69 (TC) |
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[2018] UKFTT 69 (TC)
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TC06334
Appeal number:TC/2016/04992
INCOME TAX AND NATIONAL INSURANCE – intermediaries legislation – IR35 – sections 48-61 ITEPA 2003 – personal service company – if the services were provided by the worker directly to the client, would there be a contract of employment – expenditure reimbursed by appellant to employee – whether tax relief available – appeal dismissed in principle
FIRST-TIER TRIBUNAL
TAX CHAMBER
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CHRISTA |
Appellant |
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- and - |
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THE COMMISSIONERS FOR HER MAJESTY’S |
Respondents |
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REVENUE & CUSTOMS |
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TRIBUNAL: |
JUDGE JONATHAN CANNAN |
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MR NIGEL COLLARD |
Sitting in public in Leeds on 26-28 September 2017
Mr Grant Summers of Grant Thornton UK LLP for the Appellant
Mr Adam Tolley QC and Mr Christopher Stone instructed by HM Revenue & Customs Solicitor’s Office and Legal Services for the Respondents
© CROWN COPYRIGHT 2018
DECISION
Background
1.
Christa Ackroyd
is a television journalist who has been engaged
in a variety of media roles since the 1970’s. She co-presented a daily news
digest known as “Calendar” for Yorkshire Television between 1990 and 2001. In
2001 she moved to present “Look North” on BBC1 which she continued to do until
2013. Ms
Ackroyd
worked at the BBC pursuant to two fixed term contracts between
the BBC and the appellant, Christa
Ackroyd
Media Ltd (“CAM Ltd”). The first
contract was dated 29 May 2001 and was followed by a later contract dated 4 May
2006 (“the Contract”). The Contract was terminated by the BBC on 28 June 2013.
2. This appeal is specifically concerned with the Contract. CAM Ltd is what is known as a “personal service company”. HMRC have issued determinations to CAM Ltd in respect of income tax and notices of decision in respect of national insurance. Those determinations and decisions were made on the basis of the “intermediaries legislation” contained in sections 48-61 Income Tax (Earnings and Pensions) Act 2003 (“ITEPA 2003”) and equivalent provisions in the Social Security Contributions (Intermediaries) Regulations 2000 (“the 2000 Regulations”).
3.
The determinations under appeal cover tax years 2008-09 to
2012-13. The decision notices under appeal cover tax years 2006-07 to 2012-13.
Together they total some £419,151 and were issued between March 2013 and
October 2014. The extent to which there should be a set off of corporation tax
paid by CAM Ltd and tax paid on dividends from CAM Ltd to Ms Ackroyd
has not
been agreed. Ms
Ackroyd
contends that the liability to tax and national
insurance even if the appeal is not successful is approximately £207,000. At
the invitation of the parties this decision will deal with the appeals in
principle. The question of quantum may be referred back to the tribunal if
necessary.
4.
HMRC made the determinations and decisions on the basis that the
hypothetical contract between the BBC and Ms Ackroyd
which must be considered
pursuant to the intermediaries legislation would have been a contract of
service rather than a contract for services. In slightly simplified terms, HMRC
contend that Ms
Ackroyd’s
status for the purposes of the intermediaries
legislation is that of an employee and that CAM Ltd should account for tax and
national insurance accordingly. Ms
Ackroyd
contends that her status for the
purposes of the intermediaries legislation is that of a self-employed
contractor, and there is no further liability on the part of CAM Ltd.
5. We understand that the present appeal is one of a number of other appeals involving television presenters and personal service companies. However, this is not a lead case as such.
6.
There is also an appeal against determinations and notices of
decision for income tax and national insurance in connection with various
payments by CAM Ltd to Ms Ackroyd
to reimburse expenditure incurred by Ms
Ackroyd.
Those payments relate to subscriptions for Sky TV and additional
expenditure said to have been incurred as a result of home-working. The determinations
and decisions cover periods 2007-08 to 2011-12 and together they total some
£14,469. We shall deal with the legal basis for those determinations and
decisions, our findings of fact and our reasoning in a separate section of this
decision once we have considered the principal issue relating to the
intermediaries legislation.
7. HMRC also imposed penalties on CAM Ltd in relation to both income tax and national insurance in connection with non-compliance with the intermediaries legislation. The income tax penalties were suspended and there is no appeal against those penalties. It appears that penalties were also imposed in relation to national insurance but were not suspended. It was not clear to us what if any penalties were imposed and under appeal in relation to the Sky subscriptions and the home-working expenditure. It is fair to say that the parties did not focus on the penalties in their submissions. In the circumstances the parties shall be at liberty to make further submissions in relation to penalties in the light of this decision.
8.
Both parties produced helpful skeleton arguments and written
notes incorporated into their oral closing submissions. In addition to the
documentary evidence before us, we heard oral evidence from Ms Ackroyd
and from
two other witnesses on her behalf. We set out below the nature of that evidence
and our findings of fact based on that evidence. All our findings are made on
the balance of probabilities. Before considering the evidence we set out the
legal framework which defines the principal issue to be resolved, namely
whether for the purposes of the intermediaries legislation Ms
Ackroyd
should be
treated as an employee or a self-employed contractor. The parties referred us
to a considerable body of caselaw in relation to that issue which we consider
in more detail when giving reasons for our decision.
Legal Framework
9.
The principal issue in the present appeal is whether the
intermediaries legislation applies on the facts to the relationship between Ms
Ackroyd,
CAM Ltd and the BBC. If the legislation does apply then it is agreed
that there will be a liability on the part of CAM Ltd to income tax and
national insurance, although the amount of that liability will a matter for
agreement or a subsequent hearing.
10. The purpose of the intermediaries legislation was identified by Robert Walker LJ as he then was in R (Professional Contractors Group & Others) v IRC [2001] EWCA Civ 1945 at [51]:
“ to ensure that individuals who ought to pay tax and NICs as employees cannot, by the assumption of a corporate structure, reduce and defer the liabilities imposed on employees by the United Kingdom's system of personal taxation.”
11. The question whether the intermediaries legislation applies to any particular set of circumstances is determined by reference to section 49 ITEPA 2003. The equivalent provision for national insurance purposes is regulation 6 of the 2000 Regulations. Both parties agreed that the effect of section 49 and regulation 6 for present purposes is identical and focussed their submissions on section 49. We shall do the same in this decision. Section 49 provides as follows:
“ (1) This Chapter applies where —
(a) an individual (“the worker”) personally performs, or is under an obligation personally to perform, services for another person (“the client”),
(b) the services are provided not under a contract directly between the client and the worker but under arrangements involving a third party (“the intermediary”), and
(c) the circumstances are such that —
(i) if the services were provided under a contract directly between the client and the worker, the worker would be regarded for income tax purposes as an employee of the client or the holder of an office under the client, or
...
(4) The circumstances referred to in subsection (1)(c) include the terms on which the services are provided, having regard to the terms of the contracts forming part of the arrangements under which the services are provided.”
12.
The parties agree that section 49(1)(a) and (b) are satisfied on
the facts. Ms Ackroyd
is “the worker”, the BBC is “the client” and CAM Ltd is
“the intermediary”. The issue between the parties is whether 49(1)(c) is
satisfied. The issue may therefore be shortly stated as follows:
“ If the services provided by Ms Ackroyd
were provided
under a contract directly between the BBC and Ms
Ackroyd,
would Ms
Ackroyd
be
regarded for income tax purposes as an employee of the BBC?”
13.
This is what is referred to as “the hypothetical contract” (see Usetech
Ltd v Young [2004] EWHC 2248 at [9]). There is no dispute that the actual
contractual arrangements involved CAM Ltd contracting to provide services to
the BBC which it fulfilled through Ms Ackroyd.
It is not suggested that Ms
Ackroyd
was in reality an employee of the BBC.
14. There is of course a wealth of caselaw in relation to whether an individual is an employee or self-employed. We shall deal with relevant aspects of that caselaw in our reasons below.
15.
The parties agree that in this appeal the burden of establishing
that Ms Ackroyd
would not be regarded as an employee of the BBC pursuant to the
hypothetical contract lies on CAM Ltd as the appellant.
Findings of Fact
(1) Generally
16.
The evidence before us comprised witness statements and oral
evidence on behalf of CAM Ltd. The witnesses were Ms Ackroyd,
Ms Kathryn
Apanowicz and Mr Paul Stead. Ms Apanowicz is a radio presenter on BBC Radio
York. During her career she has worked as a television presenter, an actress
and as a radio presenter. She was the partner of the late Richard Whiteley who
presented Yorkshire Television’s Calendar with Ms
Ackroyd.
Mr Stead is the
managing director of Daisybeck Productions Ltd, an independent production
company. He acts as the executive producer on all programmes made by
Daisybeck. We refer to their evidence below in so far as it is relevant to the
issues.
17.
Ms Ackroyd’s
evidence did, we think, reflect the fact that she is
more used to interviewing than being interviewed. It seemed to us that at
various points in her cross-examination she was more concerned with
understanding where the line of questioning was going than in giving direct
answers to the questions being asked. We had to remind her to answer the questions
being asked on several occasions. We do not consider that she was deliberately
trying to evade difficult questions, but we did form the impression that she
was keen to identify opportunities to present her case in the best light. She
was clearly aware that cases such as this turn on value judgments as to the
significance of various features, some pointing towards employment and some
pointing towards self-employment. In her evidence she was keen to highlight
those features which she considered would help her case, occasionally at the
expense of directly answering the questions being asked.
18.
There are underlying reasons for Ms Ackroyd’s
approach to her
evidence which we shall touch on later in the decision. Broadly, Ms
Ackroyd
has
a genuine belief that towards the end of the contract between CAM Ltd and the
BBC she was victimised by the BBC and made a scapegoat following an internal
inquiry into the BBC’s use of “freelancers”. She clearly now has a deep
mistrust of the BBC and of HMRC, the latter based in part on HMRC’s reliance on
material provided by the BBC for the purposes of their enquiry into her tax
affairs. It is not appropriate for us in the course of this decision to make
any findings as to whether Ms
Ackroyd’s
belief that she was being victimised by
the BBC is justified or not. Indeed, we did not hear any evidence from any
relevant BBC employees and we are not in a position to make such findings.
19.
There were also a number of inconsistencies between what was said
and/or confirmed by Ms Ackroyd
in correspondence and meetings compared to what
Ms
Ackroyd
said in her oral evidence. We note some of those inconsistencies
below. We have to say it would have helped to clarify the position if HMRC had
interviewed Ms
Ackroyd
in connection with their enquiry in its early stages and
in any event prior to reaching their initial status opinion on 14 September
2012 and issuing determinations and decisions in March 2013. In the event they
spoke only with her accountant, her husband and BBC employees before expressing
their initial opinion. Ms
Ackroyd
had been keen to have a meeting with HMRC
before they reached any sort of conclusion but the investigating officer did
not consider it necessary.
20.
We take all these features into account in assessing the reliability
of Ms Ackroyd’s
evidence. We do not consider that Ms
Ackroyd
was deliberately
trying to mislead us in any way. We are satisfied that all the witnesses were
honest witnesses doing their best to assist the Tribunal. However, where there
are disputes as to facts or the inferences to be drawn we do not simply accept
Ms
Ackroyd’s
evidence at face value.
21.
Ms Ackroyd
is a director of and shareholder in CAM Ltd. Her
husband, Mr Christopher Sutcliffe is also a director and shareholder. Ms
Ackroyd
has been a professional journalist for 40 years. She started with the
Halifax Evening Courier and her career progressed through radio and television.
By 1999 Ms
Ackroyd
was a co-presenter with Richard Whiteley of Yorkshire
Television’s Calendar, an early evening news and current affairs programme. It
had ratings well above those of the equivalent BBC programme, Look North. The Yorkshire region was one of the few regions where the BBC was not winning its ratings
battle with ITV. The BBC wanted to change the fortunes of Look North and Ms
Ackroyd
was approached to join the BBC on a “freelance basis”. Ms
Ackroyd
turned the offer down because at that time the BBC could not say who her
co-presenter would be. Subsequently the BBC announced that Harry Gration would
be presenting Look North.
22.
In May 2001 the BBC made a second approach to Ms Ackroyd.
Ms
Ackroyd
regarded the offer as a “defining role” in which she could use her
considerable experience to change, mould and shape Look North and she accepted
the offer. Ms
Ackroyd
started working on BBC Look North in September 2001. She
entered into a contract with the BBC dated 29 May 2001. Ms
Ackroyd’s
evidence
was that she was given control over Look North and that it was agreed she could
make whatever changes she wanted to the programme. She regarded Calendar as
having a strong regional identity which dealt with hard news brilliantly and
which was trusted by viewers. In contrast, she regarded Look North as being
staid, dull and formulaic.
23.
This first contract was for a period of 5 years. The parties were
expressed to be the BBC and Ms Ackroyd
herself, but we understand payment was
made to CAM Ltd. We were not referred to this contract in terms and neither
party sought to rely on its specific terms in construing the Contract. Indeed,
we understand it was common ground that this contract should be treated as
being between the BBC and CAM Ltd.
24.
Ms Ackroyd’s
evidence which we accept is that it was the BBC who
suggested that she should work using a personal service company and that Ms
Ackroyd
agreed to do so. This contract and later the Contract were drafted and
negotiated by the “Talent Rights Group” of the BBC rather than by BBC News. In
2001 CAM Ltd had already been incorporated by Ms
Ackroyd
and when the BBC
suggested she should use a personal service company she decided to use CAM Ltd.
The BBC did not want Ms
Ackroyd
to be an employee and we also infer that they
did not want any potential liability for PAYE and national insurance if she
were to be classified as an employee. Ms
Ackroyd
had never previously come
across the term “personal service company”. She checked the terms of the
arrangement with her accountant, Mr Biggin, who advised her that everything was
in order.
25.
In 2006, CAM Ltd was offered a new fixed term contract. Ms
Ackroyd’s
evidence is that her role did not change and we accept that evidence.
In contrast we understand that Harry Gration at that time had a two year
“freelance contract” but that he became an employee of the BBC in or about
2006. Ms
Ackroyd
was never offered an employment position at the BBC.
26.
The viewing figures improved almost immediately following Ms
Ackroyd’s
move to Look North in 2001. Look North went from a position of being
substantially behind its ITV rival to being substantially ahead.
27.
Ms Ackroyd’s
evidence is that when she came to work for the BBC
she was given a guarantee of “independence” and “control”. We do not accept
that was control of the programme itself and the BBC’s output. If anything, it
would have been control over the way in which she provided her services to the
BBC. We consider these aspects of control later in the decision
(2) The Contractual Arrangements
28.
We set out in the Appendix to this decision all relevant terms of
the Contract. Ms Ackroyd
said in evidence that she had other contracts in
relation to other work which she did for the BBC but if those contracts were in
writing they were not in evidence. We had no other evidence as to the terms of
those contracts.
29. As stated, the Contract was drafted by the BBC Talent Rights Group. There was no evidence before us as to the relationship between that group and, for example, BBC News in terms of the engagement of presenters.
30.
The Contract followed on from Ms Ackroyd’s
original contract in
2001 which was for 5 years. In 2006 she was offered a new 5 year contract but
she turned that offer down because she wanted a 7 year contract. At the same
time there were discussions about Ms
Ackroyd
giving up a newspaper column which
she wrote for the Sunday Express. The BBC wanted her to give up the column and
she also had personal reasons for wanting to do so, including a family illness
and the amount of time she had to devote to the column. In due course she
negotiated a new 7 year contract with the BBC together with an ex gratia
payment of £40,000 plus VAT which appears to have been linked to Ms
Ackroyd
giving up her newspaper column. Clause 8.2 of the Contract provided that Ms
Ackroyd
could not provide her services for publications of any kind for anyone
other than the BBC without first obtaining consent from the BBC.
31.
Ms Ackroyd
was reluctant to accept in evidence that she had a
contract of employment with CAM Ltd. We put that reluctance down to the fact
that she had not really addressed her mind to her relationship with CAM Ltd
beyond being a director and shareholder of the company. Certainly there was no
written contract of employment but we find that work carried out by Ms
Ackroyd
for the BBC was pursuant to what must have been a contract of employment
between Ms
Ackroyd
and CAM Ltd. Ms
Ackroyd
acknowledged that CAM Ltd
effectively controlled her working activities, as recorded in Clause 1 of the
Contract. She was paid for that work and CAM Ltd properly accounted for tax and
national insurance on her employment income under the PAYE regulations.
32.
Ms Ackroyd
also received dividends as a shareholder in CAM Ltd.
Income tax was properly accounted for on those dividends. Ms
Ackroyd
was not
aware of the tax advantages associated with dividends. She appears to have left
such matters entirely to her professional advisers, namely Mr Biggin and Mr
Sutcliffe.
33.
Ms Ackroyd
considered herself to be in control of her own work,
through CAM Ltd. She acknowledged that CAM Ltd was controlled by herself and
her husband together but there were no outside influences. CAM Ltd was
therefore in a position to ensure that Ms
Ackroyd
fulfilled the obligations of
CAM Ltd under the contract.
34.
Ms Ackroyd
did not accept that the BBC had any control over her
as a presenter, either in terms of the continuing changes she introduced to
Look North or indeed in relation to editorial matters. She considered that she
had “day to day editorial control”, whilst accepting that the BBC had
“editorial responsibility”. We do not accept that Ms
Ackroyd
did have day to
day editorial control over her work. That would have been inconsistent with
clause 5 of the Contract.
35.
Ms Ackroyd
in oral evidence contended that she had the last say,
for example in relation to the stories she would cover and present, but that
the BBC would have responsibility for her actions. That may well have been the
case for practical purposes in relation to issues arising whilst Ms
Ackroyd
was
live on air. However, if issues or differences of opinion arose during
pre-production meetings then we have difficulty accepting that Ms
Ackroyd
had
the ultimate decision-making authority in relation to Look North or her work on
the programme. Indeed, in a letter dated 4 December 2012 from Mr Biggin
responding to HMRC’s initial status opinion it was accepted that “the BBC is
the ultimate arbiter”. Elsewhere, its was accepted on Ms
Ackroyd’s
behalf that
“of course she could be told who she was interviewing”.
36.
Clearly in relation to what might happen whilst Ms Ackroyd
was on
air in a live programme she would have de facto control. She could ad lib,
change the scripts and effectively decide how long an item would last. That is
the nature of her professional expertise. One example was given, when the
script described three murder victims as “prostitutes”. Ms
Ackroyd
would not
use the word. This was the only example in 13 years at the BBC when Ms
Ackroyd
felt so strongly about something that she insisted her voice should prevail and
where the BBC effectively deferred to her view. We regard this as a
professional difference of opinion. The fact that the editor on that occasion
deferred and Ms
Ackroyd’s
view prevailed does not in our view reveal much if
anything about where control lay. If it had been so minded the BBC could have
informed Ms
Ackroyd
pursuant to clause 14 of the Contract that she would not be
presenting Look North that evening. There could still have been an issue as to
whether that day counted towards her obligations under clause 3.1. In practice
however, the relationship was never adversarial and no such issue ever arose.
37. The Contract is silent on the point but the context suggests to us that the BBC through the Editor would have control over content given the BBC’s editorial responsibility. That is also consistent with the BBC’s Editorial Guidelines which we consider further below.
38.
Ms Ackroyd
complained that she had provided a list of people from
the BBC who could confirm her evidence, but HMRC had not approached those
people. Whether there is substance to that criticism, it was always open to CAM
Ltd to call BBC employees as witnesses in the tribunal. If for any reason they
were reluctant then she could have applied for a witness summons. On the
evidence before us we find that the Editor had the right on behalf of the BBC
to decide which stories were covered and in what order. There was room for
professional disagreement but we are satisfied that ultimately these were
decisions for the BBC.
39.
Clause 2 of the Contract provided for a fixed term of 7 years,
subject to the termination provisions. In oral evidence Ms Ackroyd
did not
consider that a 7 year fixed term contract was unusual at the BBC. She was then
taken to comments she had provided in relation to a meeting between HMRC and
the BBC on 22 May 2012. At that time Ms
Ackroyd’s
comment on the notes of that
meeting was that a 7 year contract was “not normal” and that her contract was
unique in this regard. In the end she accepted that the Contract was unusual
and unique, especially for an older woman at the BBC. We find that it was
unusual for someone in Ms
Ackroyd’s
role to have a 7 year fixed term contract.
40.
Clause 3 gave the BBC “first call” on Ms Ackroyd’s
services for
up to 225 days per year. The Contract did not provide any means to deal with
any dispute as between the BBC and CAM Ltd over the availability of Ms
Ackroyd.
In our view however Clause 3 gave the BBC the right to require CAM Ltd to
provide Ms
Ackroyd’s
services on any particular day subject to reasonable
notice and also that she had not already worked 225 days for the BBC at the
time of year they required her services. In practice the days Ms
Ackroyd
worked
at the BBC were mutually agreed.
41.
Clause 3 is not well worded but we are satisfied that the BBC
could require Ms Ackroyd
not only to work on a particular day, but also it
could direct what work she did. They could require her if necessary to report
on a particular story without also presenting the Look North programme. That is
the effect of the words “as it may require”. There is no evidence that happened
in practice, but we find that the BBC was contractually entitled to do so. Ms
Ackroyd
accepted in cross-examination that the BBC ultimately had the right to
specify what services CAM Ltd would provide, subject to it being in connection
with her role as a presenter and reporter on Look North.
42.
Ms Ackroyd
did not have a desk at the BBC and used her own
computer and mobile phone. The Contract specified that Ms
Ackroyd
could be
required for up to 225 days per year. The contract is silent on the point, but
the understanding was that those days were in relation to Look North. In
practice Ms
Ackroyd
would tell the BBC which days she was not available for
Look North. Ms
Ackroyd
was not aware of the BBC keeping a log of the days she worked
and there was no reliable evidence that they did so. She kept her own diaries.
43.
In addition to the 225 days where the BBC would have first call
on Ms Ackroyd’s
services, clauses 3.2 and 3.4 envisaged the BBC might request
her services for BBC radio or other contributions. We say request, because the
provision of services pursuant to clauses 3.2 and 3.4 was subject to mutual
agreement. In theory Ms
Ackroyd
could have withheld agreement unless she was
paid an additional fee if she had been minded so to do. In contrast clause 3.3
enabled the BBC to require Ms
Ackroyd’s
attendance at public events. We
construe this to be in addition to the 225 days referred to in clause 3.1 which
relate only to the output of BBC Yorkshire.
44.
Ms Ackroyd’s
evidence was that in practice, attendance at public
events amounted to two events per year: Children in Need, where she would act
as a regional presenter, and possibly at annual BBC open days. Ms
Ackroyd
regarded this as part of the 225 days, but little if anything turns on that.
There was no contractual right to additional remuneration for attendance at
public events.
45.
Ms Ackroyd’s
evidence was that the 225 days under clause 3.1 left
her plenty of time to do other things, although she also said that part of the
reason why she wanted to end her Sunday Express column in 2007 was that it
increasingly took up too much time. 225 days is equivalent to 45 working weeks
of 5 days, but as a professional journalist we accept she might often work 7
days a week. There were no set hours in the Contract and she would work a 60-80
hour working week if that was what was needed to do the job. We are quite
satisfied that Ms
Ackroyd
was devoted to doing a job she loved and was prepared
to work long and hard to ensure the output she was involved in was as
professional as possible.
46.
Clause 7 provided for CAM Ltd to be reimbursed travel and
subsistence payments at the rates payable to freelance contributors. In
addition, Ms Ackroyd
was entitled to a payment of up to £3,000 per year for the
purchase of suitable clothing, on production of receipts. This sum was paid in
each year of the Contract.
47.
Clause 8.1 restricted Ms Ackroyd
from providing any services in
respect of television or radio in the UK or Republic of Ireland without the
consent of the BBC, or for online services for anyone other than the BBC. Ms
Ackroyd
described this as “mutually beneficial” in that it was consistent with
what she wanted to achieve with Look North. We do not consider that the clause
itself was “mutually beneficial”. It was a clear restriction on what Ms
Ackroyd
could do in relation to other activities, whether or not she wanted to engage
in such activities. The effect was that she could not provide services as a
television presenter or broadcaster in the UK or the Republic of Ireland
without the consent of the BBC. She could not provide services for publications
other than for the BBC without the consent of the BBC.
48.
Clause 9 refers to the BBC’s undertakings in relation to
“Programme Standards” pursuant to an agreement it had with the Secretary of
State for Culture Media and Sport, in particular in relation to impartiality.
Ms Ackroyd
was obliged pursuant to clause 9 not to engage in any conduct which
would compromise or call into question the impartiality or integrity of the BBC
or Ms
Ackroyd.
The clause goes on to restrict Ms
Ackroyd
in relation to certain
activities without the prior written consent of the BBC. The restricted activities
included involvement or association with anyone having a trading relationship
with the BBC, providing interview training, being publicly associated with any
charity or government initiative or promoting goods or services.
49.
Ms Ackroyd
did not consider that these restrictions had any
impact on her. For example, she considered that the restriction on being
associated with a charity only applied to “Christa
Ackroyd
BBC” and not
“Christa
Ackroyd
the person”. We do not accept that there was any such distinction.
The restrictions applied to Ms
Ackroyd
generally. In practice the BBC had no
real cause to enforce these restrictions until shortly before termination of
the contract in 2013 when the BBC appears to have decided to enforce strictly
the terms of the Contract.
50.
Clause 12 provided for CAM Ltd to indemnify the BBC for any
breach of the warranties given in clauses 5 and 11, including any liability for
breach of copyright or defamation by Ms Ackroyd.
51.
Clause 14 provided that the BBC were not obliged to call on Ms
Ackroyd’s
services, although they would still be obliged to pay CAM Ltd its
fees under the Contract if they did not do so. In practice the BBC did always
call upon Ms
Ackroyd’s
services for Look North until March 2013.
52.
Clause 18 prohibited CAM Ltd from using a substitute for Ms
Ackroyd.
53.
Ms Ackroyd
did not have a line manager as such and she was not
subject to formal appraisals. In contrast, Harry Gration’s line manager was
Editor of Look North, who was Mr Tim Smith for at least part of the period up
to 2013. Ms
Ackroyd
had no set hours and subject to programming commitments she
was able to come and go as she pleased. She had to give reasonable notice if
she was not available to present Look North. That would usually be 2-3 weeks notice
if there was something else in her diary. She had no entitlement to sick pay,
holiday pay, maternity leave, pension rights or other benefits. That was
because the Contract was with CAM Ltd. Such matters would have been subject to
Ms
Ackroyd’s
employment contract with CAM Ltd.
54. The material before us contained a sample BBC employment contract and freelance contract. We were not referred to those contracts in detail and we heard no evidence as to the detailed terms of any other BBC employees. In our view it is not a worthwhile exercise to compare the contract with CAM Ltd to employment contracts entered into by the BBC. We must construe the hypothetical contract on its own terms.
(3) Payment of Fees
55.
Clause 6 provided for fees to be paid by the BBC to CAM Ltd in
respect of the services to be provided by Ms Ackroyd.
Fees were payable in
accordance with the Schedule and the sums payable were exclusive of VAT. The
BBC produced what are known as “self-billed” invoices for VAT purposes and CAM
Ltd accounted for VAT accordingly.
56.
The payments provided for in the Schedule started at £163,233 for
the year ended 31 December 2007, increasing in line with the RPI in each
subsequent year of the Contract. The amount payable was a single amount in
respect of each year, payable by monthly instalments. It was not dependent on
the number of days or hours worked by Ms Ackroyd,
provided Ms
Ackroyd
was
available for work when required by the BBC pursuant to clause 3. In the event
that Ms
Ackroyd
failed for any reason to render the services in clause 3 then
clause 6.2 provided that the payment was to be reduced proportionately unless
the BBC decided otherwise. In practice the question of reduction never arose.
Provided Ms
Ackroyd
made herself available and performed the services for at
least 225 days, which she did, then CAM Ltd was entitled to the payment
57.
Paragraph H of the Schedule provided for CAM Ltd to receive a
further payment of £7,500 for each 6 month period if ratings for the programming
of Ms Ackroyd
consistently and significantly exceeded the ratings of the BBC’s
commercial competition. All parties understood this to mean the ratings of Look
North against the ratings of Calendar. Ms
Ackroyd
objected to this being
described as a bonus and preferred to describe it as a success fee. She did
acknowledge that it was a performance related payment. Ms
Ackroyd
understood
that she was the only person ever to negotiate such a clause at the BBC but we
have no evidence that is in fact the case. In every year during which Ms
Ackroyd
worked at the BBC the performance related bonus was paid because the
ratings of Look North significantly exceeded those of Calendar.
58.
Ms Ackroyd’s
evidence was that she was paid much more than the
equivalent rate for a newsreader, a journalist or a producer. She said that she
was paid “as talent”. It was not clear what Ms
Ackroyd
meant by this, but in
her evidence she described herself as unique within the BBC because of her role
and what was expected of her in terms of initially winning the ratings battle
with ITV and then keeping Look North ahead of the ITV equivalent. We have
already made findings as to the nature of Ms
Ackroyd’s
role. We cannot say that
it was unique but we are satisfied that she was expected to drive ratings and
was entitled to a performance related bonus in that regard.
(4) Working Practices
59.
Ms Ackroyd’s
witness statement described her involvement in Look
North at the time she joined the BBC as follows:
“I was genuinely consulted with from the beginning … on the very fabric, style and perception of BBC Look North. I was asked for my views on style and delivery and then tasked with changing the format in line with my ideas… In particular, I suggested (and it was acted upon) that the BBC change and soften the actual set in order to make the programme more reflective of the light and shade of the county of Yorkshire and to encourage the Producers to do so. It was also my suggestion and indeed, written into negotiations, that a make-up department be established, because I advised (on the basis of my past experience) that guests and contributors to the programme needed to feel better supported and nurtured than in the past.”
60.
We accept that evidence entirely. Ms Ackroyd
was a very
successful television journalist and presenter. We are satisfied that her
journalistic and presenting skills contributed in large measure to the success
of BBC Look North after she joined the programme. It is notable in this passage
of her evidence in chief, derived from a letter which Ms
Ackroyd
sent to HMRC
on 11 April 2013, that Ms
Ackroyd
uses phrases such as “I was asked for my
views”, “in line with my ideas”, “I suggested”, “it was also my suggestion” and
“I advised”. It is clear from that phraseology and from clause 3 of the
Contract that Ms
Ackroyd
was not being paid to produce an end product. We are
satisfied that the ultimate decision as to how the programme might be changed
lay with the BBC. Having said that, Ms
Ackroyd
made editorial contributions and
was expected to drive change and maintain strong viewing figures. She did drive
change including changes to the lighting, the sound, the sets, introducing
make-up facilities for guests and in other areas.
61.
Ms Ackroyd
acknowledged that producing Look North was a “team
effort” with some tremendous journalists and incredible people on the team. She
maintained that she was “leading that team”. We accept that Ms
Ackroyd
drove
the changes that enabled Look North to stay significantly ahead of Calendar. We
also accept Ms
Ackroyd’s
evidence that she ran training programmes for on-air
staff and mentored technical staff. We do not accept solely on the basis of Ms
Ackroyd’s
evidence that she led the team in the sense of control and
decision-making.
61. Ms Ackroyd
was the “anchor” for Look North
together with Harry Gration. This role was usually carried out in the studio,
but she would also anchor the programme when conducting an outside broadcast.
There was no typical day. She may have a major interview to prepare for. She would
do her own research. Arranging such interviews could take days, weeks or
months. In one case she led a small team for nine months investigating the
background to a series of murders known as the Crossbow Cannibal killings. She
controlled the research, filming and subsequent broadcast material. She
described herself as the researcher, producer and presenter in relation to this
work and we are satisfied that is an accurate description. However, we are
satisfied that it was a matter for the BBC to decide whether and in what way to
use the story. They also had the right to edit Ms
Ackroyd’s
material.
62.
More usually, Ms Ackroyd
would present Look North 5 days a week.
This would involve presenting the flagship programme at 6.30pm. It might also
include presenting lunchtime and late night news programmes which came under
the Look North title.
63.
A working day would usually start with a blank sheet of paper.
There would be a producers’ breakfast meeting at 9.30 – 10.00 am with
discussions about what to include in the programme. Ms Ackroyd
would not be at
that meeting. She would already have had discussions with the producers and may
have set off to cover a particular story. The producers would dispatch various
reporters to various stories. Ms
Ackroyd
would go out and research a news story
or conduct an interview on camera. She would cover the biggest stories, or the
stories in which she had most interest. If she had a major interview she might
be forceful in demanding that it should be a lead news item. There were no set
timings or shifts. Production discussions would take shape during the day. The
only constant was that Look North would be on air at 6.30pm and Ms
Ackroyd
would be presenting it with Harry Gration unless either was unavailable for
some reason.
64.
Discussions about content would take place throughout the day to
shape the programme. There would be a 3pm meeting in the newsroom when the
material from various reporters came in. Usually there would be a natural
running order for the stories. There may be a debate, but it was a
collaborative effort. That meeting would involve the Editor, the producers, the
sound and floor-manager and the Director. Harry Gration would be there. Ms
Ackroyd
would be there as often as she could but she might still be out covering
a story. The other journalists would not attend because they would probably
still be out covering stories.
65.
In practice Ms Ackroyd
would use her time as she saw fit during
the day, but she would almost always be back at the BBC studios in Leeds
by 3.30pm for pre-production. She would oversee the editing of her material.
Look North had a number of editors who would edit pieces, dealing technically
with the recorded image and sound. Ms
Ackroyd
chose to oversee the editing of
her material as part of her professional approach to working on the programme.
By virtue of clause 3 the BBC could if necessary have required her to do that
work as part of the “reasonable ancillary services” it could require CAM Ltd to
provide.
66. The producers would prepare outlines of the running order and the scripts which would be accessible by computer. Those details would be sent as a package to the Director. In broad terms the Director’s job was to make the programme happen, including how the programme looked and what camera shots to use.
67.
According to Ms Ackroyd
the scripts would then be “greened” by a
producer. This involved finalising the wording of a script and the length of an
item, but Ms
Ackroyd
could and would change the script constantly right up to
final delivery on air. Back at the studio Ms
Ackroyd
might completely re-write
her script on the computer. For example, she might want to ensure that it used
language that “sounded like” her. That process could take place right up to the
last minute and continue whilst on air.
68.
In late 2011/early 2012 Tim Smith the Editor of Look North spoke
with Ms Ackroyd
about last minute changes to scripts. Mr Smith wanted such
changes to be made earlier and Ms
Ackroyd
agreed, although it is in the nature
of a live news programme that changes may have to be made right up to the end
of the programme. We are satisfied that Ms
Ackroyd
would lead such changes and
that her role was not simply reading a script from an autocue. Interviews,
whether with high profile individuals or others simply caught up in a news
story, would almost always be unscripted.
69.
Ms Ackroyd
would wear an earpiece during a programme whether she
was in the studio or on an outside broadcast. The earpiece enabled “talkback”
from the gallery of the studio. It was not used to give Ms
Ackroyd
instructions, but to give her information such as timings to ensure the smooth
running of the programme.
70. Immediately after each programme there would be a post-production meeting to hear feedback about the programme. It was not in any sense an appraisal. It would be a short discussion usually about what had not happened in the programme. There would be no recriminations as such if anything had not gone to plan.
71.
Ms Ackroyd
maintained that she “was in charge of [her] part” of
the programme and effectively could not be overruled. However, following a
meeting she had with HMRC on 13 August 2013 Ms
Ackroyd
accepted that she could
be told who she was interviewing. She maintained that how the interview was
conducted was a matter for her. We accept that is the case, particularly in
relation to a live interview. To a very large extent Ms
Ackroyd
was expected to
use her professional judgment in the work she did.
72. The role of the Editor was to have an overview of the whole programme each day. In particular the Editor would oversee and have responsibility for the producers. The Editor was also Harry Gration’s line manager.
73.
It is in the nature of a news programme that a story may break
during the day or indeed during the programme. For example Ms Ackroyd
covered
the kidnapping of Shannon Matthews on location from Dewsbury. She anchored the
programme by way of outside broadcast. Similarly, Ms
Ackroyd
anchored the
programme from Hebden Bridge when the town was flooded and from London during the 2012 Olympics. In those circumstances there may be no producer on site,
no director, no script, no autocue and no monitor. The broadcast would
effectively be controlled by Ms
Ackroyd.
74.
Ms Ackroyd
was part of the public face of the BBC in the Yorkshire region through her role as a presenter of Look North. Having said that, some
members of the public still associate her with her time as a presenter of
Calendar for ITV.
(5) Other Activities
75.
The scope of the services to be provided by CAM Ltd were defined
by clause 3. That clause was supplemented by clause 11.1 by which CAM Ltd
warranted that no other contract or engagement or any other reason would
inhibit or prevent Ms Ackroyd
from fulfilling her obligations under the
Contract.
76.
At the time Ms Ackroyd
was approached by the BBC to present Look
North she had a newspaper column in the Daily Express, later in the Sunday
Express. In 2004 the BBC wanted Ms
Ackroyd
to give up the column but Ms
Ackroyd
refused. She continued to write the column until January 2007 as previously
described. At that time her fee for writing the column was approximately
£40,000 per year.
77.
Ms Ackroyd
does not make personal appearances in what she
described as a “show and go”. She did not do what she considered to be
“inconsequential appearances” such as the opening of an event or “cutting a
ribbon”. She did however offer her services as a presenter at conferences and events
in which she had a particular interest. For example, presenting a “Women in the
Workplace” conference for Morrisons Supermarkets, presenting award ceremonies
for various emergency services and supporting organisations such as Bradford
University and the Yorkshire Tourist Board. Ms
Ackroyd
also appeared as
herself in a TV network drama called “The Syndicate” and in the film “The
Calendar Girls”.
78.
Ms Ackroyd’s
evidence was that she did not seek permission from
the BBC before accepting such engagements, although she might inform the Editor
of Look North as a courtesy. We accept that evidence, although strictly CAM Ltd
was required to ensure that Ms
Ackroyd
had consent from the BBC for such
activities pursuant to clauses 1, 8 and 9 of the Contract.
79.
Ms Ackroyd
had a high profile in Yorkshire. Many people would
contact her directly about engaging her services. If anyone tried to contact
her through the BBC then they would be told they should contact Ms
Ackroyd
directly.
80.
Ms Ackroyd
told us and we accept that she had a lot more freedom
and flexibility to take on other engagements compared to colleagues who were
employed by the BBC, such as Harry Gration. Prior to 2013 she was never
prevented from undertaking any activity. In relation to many events Ms
Ackroyd
made no charge for her services because she considered they were worthy causes.
It was common ground that Ms
Ackroyd
was not pro-active in seeking other
clients. She did not need to be because she regarded the Contract as very
lucrative and she was content to devote her energies to Look North. In early
2012 Harry Gration and the weatherman on the show were told by the Editor that
they could no longer charge for outside appearances. In contrast it was
accepted by the Editor that Ms
Ackroyd
could continue to charge because she was
not an employee.
81.
It is clear that the vast majority of Ms Ackroyd’s
income during
the period of the Contract, until the Contract was terminated in 2013, came
from the BBC. Her income from other sources was very small by comparison as
indicated by the following figures:
Year ended 31 December |
Gross Income from BBC £ |
Other Gross Income £ |
Proportion from BBC
|
|
|
|
|
2009 |
202,316 |
4,000 |
98% |
2010 |
176,596 |
6,416 |
96.5% |
82.
Ms Ackroyd
obtained some work through The Speakers Agency. In one
contract with the Speakers Agency dated 15 January 2010 Ms
Ackroyd’s
address
was given as c/o BBC Look North. On occasion correspondence in relation to Ms
Ackroyd’s
other activities would be addressed to Ms
Ackroyd
c/o BBC Look North.
That is not surprising because the BBC published Ms
Ackroyd’s
profile and
contact details on its website and it was well known that Ms
Ackroyd
worked at
the BBC in Leeds.
83.
There was one example of CAM Ltd invoicing the BBC for work other
than in relation to Look North. That was in September 2004 when Ms Ackroyd
presented a national news programme from London. This seems to have been an
isolated example. Ms
Ackroyd
had no desire to work outside the Yorkshire region.
84.
We heard evidence from Mr Paul Stead. He has known Ms Ackroyd
for
many years and engaged Ms
Ackroyd
to do a voice over for a television
documentary called Georgia’s Story which told the story of an obese 15 year old
girl. The engagement was arranged directly between Mr Stead and Ms
Ackroyd,
not
via the BBC. Ms
Ackroyd
re-wrote the script. The programme was shown on the BBC
and sold around the world. Ms
Ackroyd
invoiced Daisybeck £500 plus VAT for her
work. Mr Stead would discuss ideas with Ms
Ackroyd
a couple of time a year,
although Georgia’s Story is the only time Ms
Ackroyd
has worked for Daisybeck.
He described her role as akin to a producer.
85.
The Contract required Ms Ackroyd
to attend public events as
required by the BBC. Ms
Ackroyd
said that these would be few and far between.
If she was attending an awards dinner then she considered she was attending as
herself, and not on behalf of the BBC.
(6) Control Generally
86.
Ms Ackroyd
provided extracts from her diary entries between 2007
and 2013, principally to demonstrate that she was able to choose when she
worked, coming and going outside the established shift pattern subject to
fulfilling her obligation to work 225 days per year. We accept that evidence.
On occasion she worked for other organisations without question from the BBC.
We are satisfied that is what happened in practice. Having said that, there was
no reason for the BBC to assert its rights under the Contract to restrict the activities
of Ms
Ackroyd
unless the BBC considered there was a significant breach of
contract.
87.
Ms Ackroyd
was able to use her journalistic skills to identify
and develop stories however as she chose. She worked on high profile stories
such as the kidnap of Shannon Matthews, the shooting of PC Sharon Beshenivsky
and many others. At the time of the shooting of PC Sharon Beshenivsky Ms
Ackroyd
received a tip off that a police officer had been shot in Bradford. Her contacts confirmed that it was a female PC. At the time she was hosting an
outside broadcast in relation to Children in Need. She told us that she
“demanded to go back to the studio” so that she would be there as the story
developed. We accept that evidence.
88.
We are satisfied that Ms Ackroyd
had a high degree of autonomy in
carrying out her work and in identifying the stories she wished to follow. We
heard evidence from Ms Kathryn Apanowicz who had been interviewed by Ms
Ackroyd
on a number of occasions and her evidence is consistent with that finding.
89.
Ms Ackroyd
considered herself to be unique at the BBC in this
regard, reflected in the amount she was paid which she described as far more
than any other regional presenter and many national newsreaders. Ms
Ackroyd
suggested that this was because she was much more than a newsreader. We cannot
say whether Ms
Ackroyd
was unique in this sense, but we are satisfied that she
was not simply a newsreader.
90.
Ms Ackroyd’s
relationship with the BBC and its employees working
on Look North was not adversarial. No-one ever tried to stop her from doing
anything. It was understood that if there was a big story, Ms
Ackroyd
would be
there. Ms
Ackroyd
considered that HMRC were seeking to portray her as someone
who is given a script and reads from an autocue. We are satisfied that is not
the case. Indeed, it was not how Mr Tolley put the case on behalf of HMRC.
91.
HMRC allege that Ms Ackroyd
attended BBC training events. Ms
Ackroyd
accepted that she attended a training session on social media on 24
March 2011. Having been invited, she asked rhetorically why she would not go.
She also accepted that she attended a training session on Safeguarding BBC
Values on 13 February 2013, shortly before she was told by the BBC that she was
being withdrawn from presenting Look North. She also recalled telling the
trainer that the restriction on associating with charities did not apply to her
because she was freelance.
92.
Ms Ackroyd
denied attending a training session on Safeguarding
Trust – English Regions on 26 February 2008 because her dairy indicated this
was in the middle of the Shannon Matthews abduction. In a meeting with HMRC, Ms
Helen Thomas the BBC Head of Region for Yorkshire said that no-one could read
the news if they had not done the Safeguarding Trust training session. This
training session appears to relate to the BBC’s Editorial Guidelines. It is not
clear however whether Ms
Ackroyd
attended this particular training session.
(7) BBC Editorial Guidelines
93.
The BBC’s “Editorial Guidelines” encapsulate the values of the
BBC and the editorial standards that every producer of BBC content is expected
to follow. They are revised every four or five years. New editions were
produced in 2005 and in October 2010. It is HMRC’s case that Ms Ackroyd
was
contractually bound by the Editorial Guidelines, and that this is one aspect of
the BBC’s control over Ms
Ackroyd’s
work.
94.
The suggestion that Ms Ackroyd
was bound by the Editorial
Guidelines appears first to have been made by Ms Thomas in a meeting she had
with HMRC on 2 August 2013. The notes of that meeting suggested that Ms Thomas
equated the Editorial Guidelines with the Programme Standards referred to in
Clause 9.1 of the Contract. In written comments by Ms
Ackroyd
on the notes of
that meeting Ms
Ackroyd,
who was not present, states “these were the
guidelines”. At first sight it seemed that Ms
Ackroyd
was accepting that the
Programme Standards were the Editorial Guidelines. In oral evidence however she
was adamant that was not the case.
95. The Editorial Guidelines were mentioned in emails from Mr David Smith of the BBC Tax department to HMRC in 2014. Mr Smith also suggested that a reference to Programme Standards in clause 9.1 of the Contract was a reference to the Editorial Guidelines.
96.
Mr Tolley put to Ms Ackroyd
and submitted to us that the
reference to Programme Standards in Clause 9 of the Contract was a reference to
the BBC’s Editorial Guidelines.
97. It is striking that there is no evidence from the BBC in this appeal, in relation to this issue and others. It is common ground that the Editorial Guidelines were previously called the Producers’ Guidelines. There was an extract from the fourth edition of the Producers’ Guidelines in evidence. It is not clear what date these were published but it was sometime before June 2005 when they became the Editorial Guidelines. The introduction to the Producers’ Guidelines was by Mr Greg Dyke, the then Director General. He states:
“ These Guidelines are a public statement of [the BBC’s] values and standards and how we expect our programme-makers to achieve them. They detail the BBC’s approach to the most difficult editorial issues and provide guidance which programme makers at all levels need to be aware of and follow
…
These Guidelines are a working document for programme teams to enable them to think their way through some of the more difficult dilemmas they may face …
Our staff, those freelances working with us, and the independent producers we commission – all need to be familiar with these Guidelines and to apply their underlying principles. This is more than just a moral responsibility; it is also a contractual obligation for everyone who makes programmes for the BBC …”
Emphasis added
98. The Producers’ Guidelines comprise some 359 pages dealing with values such as impartiality, fairness, taste and decency; issues in programmes such as children in programmes and the reporting of suffering and distress; programme funding and external relationships; politics and various other matters.
99. In June 2005 a new version of the Editorial Guidelines was published. They were said to be shorter and clearer, but were still 201 pages in length dealing with similar issues as the previous Producers’ Guidelines. The introduction by Mr Mark Thompson, the then Director General, included the following:
“ Many of the guidelines are advisory, but some are mandatory and have the force of instructions… So please read the guidelines and keep them by your side as you work …”
100. The Editorial Guidelines were available on the BBC website. A section on the BBC’s Editorial Values contained the following remarks:
“ The BBC Editorial Guidelines are a statement of the Values and standards we have set for ourselves over the years. They also codify the good practice we expect from the creators and makers of all BBC content, whether it is made by the BBC itself or by an independent company working for the BBC …”
101. In 2010 a new version of the Editorial Guidelines was published. They were described by Sir Michael Lyons, the Chairman of the BBC, as “one of the most important documents the BBC publishes”. By way of introduction he said:
“ … these Guidelines set out the standards required of everyone making programmes and other content for the BBC.”
102. A section on Using the Guidelines contained the following:
“ The BBC Editorial Guidelines apply to all of our content whoever creates or makes it and wherever and however it is received.
…
Any proposal to step outside the Editorial Guidelines must be editorially justified. It must be discussed and agreed in advance with a senior editorial figure or, for independents, with the commissioning editor. Director Editorial Policy and Standards must also be consulted.
…
2.2.1 Editorial responsibility in the BBC rests with the editorial chain of management from programme or content producer, whether in-house or independent, through to divisional director, and to the BBC’s Director-General, who is the editor-in chief.”
103.
Ms Ackroyd’s
evidence was that there was no discussion of the
Producers’ Guidelines at the time she first started to work at the BBC. Her
evidence was that she had only ever been given one copy of any guidelines. She
said this was in 2004 when a copy was put in everyone’s pigeonhole. There was
no reference to the Editorial Guidelines at the time the Contract was being
negotiated in 2006. She said that she had never referred to the Editorial
Guidelines nor was she ever referred to them. She considered the Editorial
Guidelines she had been given were guidance for less experienced journalists
which simply described what was best practice. She had read the Editorial
Guidelines but would have no need to refer to them specifically. She felt they
were more a part of the BBC’s “mission statement” and that they were there to
demonstrate the BBC’s values to the public. Ms
Ackroyd
said that “they didn’t
apply to me”. She would operate her own professional guidelines such as
honesty, integrity and respecting human dignity.
104.
Ms Ackroyd
said that she would expect a reference to the
Editorial Guidelines in her contract if she was bound by them as a matter of
contract. She did not regard them as contractually binding but she did regard
them as “of great interest”.
105.
On a number of occasions Ms Ackroyd
referred to having received
only one copy of guidelines throughout the time she was working at the BBC,
which was in 2004. When she was taken to the 2010 Editorial Guidelines she said
that she had never seen the document or read the introduction. However, we are
satisfied that Ms
Ackroyd
received a round robin email from Mr Thompson dated
11 October 2010 drawing her attention to the launch of the new BBC Editorial
Guidelines. The email expressly said as follows:
“ The Guidelines show you how to ask and answer important questions like these – and where we have to follow rules, they’ll tell you what the rules are too.
As before, the new Guidelines are being published as a book – everyone involved with our content should get a personal copy by the end of the week. From tomorrow we are also launching a new Guidelines website … It contains the whole of the Guidelines, together with Editorial Policy Guidance …
Whatever your role in making the BBC’s content, what you do and how you do it makes a difference. Using the Guidelines, and reflecting their values in your work, is at the heart of making the BBC’s content something we can be proud of.”
106.
There was some suggestion that Ms Ackroyd
went to a roadshow
explaining the Editorial Guidelines at the time the 2010 version was introduced
but she had no recollection of doing so. There is no reliable evidence that she
did and we make no finding in that regard.
107.
Ms Ackroyd’s
approach to the Editorial Guidelines seems at odds
with the introductory remarks contained in various versions of the Editorial
Guidelines, including the Producers’ Guidelines which she received in 2004 and
Mr Thompson’s email. However, we are not satisfied that the Programme Standards
referred to in Clause 9 of the Contract is a reference to the Producers’
Guidelines or the Editorial Guidelines. There is no direct reliable evidence
that is the case, nor is there any evidence as to the content of the
“agreement” with the Secretary of State referred to in Clause 9.
108.
Mr Tolley submitted that even if compliance with the Editorial
Guidelines was not a contractual obligation, Ms Ackroyd
was still obliged to
follow them. The source of that obligation was not explained but in practical
terms we accept the submission. If Ms
Ackroyd
did not act in accordance with
the Editorial Guidelines then her contract might not be renewed, albeit she had
a 7 year contract. Alternatively, in any particular situation the BBC could
decide not to call on Ms
Ackroyd
to present or work on Look North, although
arguably they would remain liable to make payments under the contract. In our
view the real significance of the Editorial Guidelines in the present case is
that they provide part of the context in which the parties entered into the
Contract. We also consider that they were in part the standards by reference to
which Ms
Ackroyd
would be judged professionally by the BBC and others working
on Look North. We return to the Editorial Guidelines in our reasons below.
(8) HMRC’s Enquiry
109.
HMRC’s enquiry into the tax affairs of CAM Ltd commenced on 22
February 2011. It was described as a “check of employer and contractor
records”. It was not clear from the opening letter that it was an enquiry into
Ms Ackroyd’s
status for the purposes of IR35. In the circumstances Ms
Ackroyd
did not attend the initial meeting on 1 September 2011 which was attended by Mr
Sutcliffe and Mr Biggin. Ms
Ackroyd’s
husband is a director of CAM Ltd. He is
an accountant and acts as a bookkeeper for CAM Ltd. The meeting covered in
detail the nature of Ms
Ackroyd’s
work for the BBC. It is unfortunate that the
significance of that meeting was not made apparent to Ms
Ackroyd
because HMRC
rely on answers provided by Mr Sutcliffe concerning the relationship between Ms
Ackroyd
and the BBC. However, Ms
Ackroyd
did at least have an opportunity to
comment in correspondence on the notes of what was said at the meeting and at
other meetings between HMRC and BBC employees.
110.
Notes of the meeting were provided by HMRC and CAM Ltd was
invited to agree the notes. Mr Biggin replied setting out points where issue
was taken in relation to the notes. Thereafter Ms Ackroyd
said that she tried
to meet with the HMRC officers but they would not meet with her until after
they had made their decision that IR35 was engaged.
111. The enquiry was conducted by Mr Ian Pannett and he set out his opinion and reasons for the application of IR35 to CAM Ltd on 14 September 2012. It was a decision in principle and there was no assessment at that stage. CAM Ltd was invited to provide any further information within 35 days. Documentation to quantify the tax and national insurance that would be due was also requested in separate correspondence.
112.
The first decisions and determinations in relation to years
2006-07 and 2007-08 were issued to CAM Ltd on 7 March 2013. There was a
subsequent meeting between Ms Ackroyd
and HMRC on 13 August 2013, after Ms
Ackroyd’s
contract had been terminated.
113.
In the course of HMRC’s enquiry, Mr Pannett spoke with Mr Smith
of the BBC tax department and with Ms Thomas. Ms Ackroyd
was critical of the
enquiry because she did not consider that these individuals had any first hand
knowledge about her role. She had never met Mr Smith. She knew Ms Thomas very
well but as Head of Region she would rarely have contact with her. Ms Thomas
trusted Ms
Ackroyd
to work “without interference”. Neither individual was
involved in negotiating the contracts between the BBC and CAM Ltd. Ms
Ackroyd
considered that the officer had reached his conclusion on inadequate information
as to her role. In particular, that he wrongly understood she was simply a
presenter using an autocue who was fed questions and controlled by the
producers.
114. Mr Summers submitted that the evidence of HMRC’s dealings with the BBC during the enquiry suggested that there may have been some “collusion” between the two bodies. We do not accept that any such case is made out.
115.
Ms Ackroyd
said that when HMRC contacted the BBC for the purposes
of their enquiry in or about May 2012 the BBC became very concerned. The
enquiry led the BBC to question Ms
Ackroyd’s
integrity and “out of the blue” in
early 2013 she was taken off air. Thereafter the BBC refused to meet with Ms
Ackroyd
or her advisers.
116.
Between 3 May 2013 and 17 May 2013 there was a chain of email
correspondence between Ms Ackroyd,
Ms Thomas and Mr Tim Smith in which Ms
Ackroyd
effectively asked for permission from the BBC to be involved in various
engagements. In particular, to become President of the Friends of the Bronte
Church, to attend a Marie Curie lunch in aid of Bradford Hospice and to
demonstrate cooking at the World Curry Festival in Bradford. Permission to
become President of the Friends of the Bronte Church was refused on the basis
of the Editorial Guidelines. The Editorial Guidelines provided that those
involved in the production of BBC content must have no significant connection
with the organisations featured and it was suggested that a story about the
church roof might be featured in future. The appearance at the World Curry
Festival was approved. Ms
Ackroyd
said that she sent these email requests
‘tongue in cheek’. She was trying to make a point by asking permission for
every little event which previously she would never have asked permission for.
By then the relationship had completely broken down.
117.
We do not consider that much weight is to be given to this email
correspondence. Nor do we consider that Ms Ackroyd’s
failure to challenge the
refusal based on Editorial Guidelines adds much weight to HMRC’s case that Ms
Ackroyd
was contractually bound by the Editorial Guidelines. We accept Ms
Ackroyd’s
evidence that at this stage there were stories in the newspapers
about her relationship with the BBC. She felt that the BBC was effectively
trying to establish control retrospectively and she did not take it seriously.
More likely in our view is that the BBC began relying on what they understood
to be their strict contractual rights.
(8) Termination of the Contract
118.
On 22 May 2012 there was a meeting between Ms Thomas and Mr Smith
of the BBC and HMRC in connection with CAM Ltd and Ms Ackroyd’s
work at the
BBC.
119.
On 5 July 2012 Helen Thomas wrote a rather opaque letter to Ms
Ackroyd
ahead of any negotiations there might be at the end of the Contract in
2013. The underlying message was that the “market value” for presenters had
fallen since 2007. In fact it does not appear that any negotiations followed
this letter.
120.
Ms Ackroyd
considered that the BBC’s attitude towards her changed
from the beginning of 2013. This followed evidence from the BBC given to the
House of Commons Public Accounts Committee in July 2012 and the publication of
a review undertaken by Deloitte on behalf of the BBC into freelance engagements
at the BBC. We know that the review was published on 7 November 2012. The
review recognised that the BBC required a large number of freelancers to make
its programmes and referred to the BBC’s policy of engaging a small number of
“on air” individuals via personal service companies. As a result of the review
the BBC changed the way it viewed personal service companies. It no longer
intended to engage on air talent with long term contracts through personal
service companies. The BBC anticipated that a number of such individuals would
be offered employment contracts when their current contracts expired. No
employment contract was ever offered to Ms
Ackroyd.
121.
There was a meeting between Ms Ackroyd
and Ms Thomas on 21
February 2013 where the HMRC investigation was discussed. On 4 March 2013,
following a conversation, Helen Thomas wrote to Ms
Ackroyd
to say that she was
being withdrawn from her presenting duties with immediate effect. The BBC
purported to be exercising its rights under clause 9 of the Contract. Relevant
parts of the letter read as follows:
“ … [as] HMRC has now issued a formal demand against you for unpaid tax which you are unable to pay and propose to challenge, the BBC has decided that it is in both your interests and the BBC’s that you be withdrawn from your presenting duties…
We feel it is important to allow you to focus on the dispute with HMRC, but also, and importantly, the BBC must ensure that it complies with its obligations of impartiality and avoids any conflict of interest with your role as a presenter … For reference the relevant obligations are set out in the BBC Charter and Agreement, and in the BBC’s Editorial Guidelines, including in sections 4, 14 and 15. We are also concerned to ensure that the BBC is not brought into disrepute.
…
Finally, I wish to remind you of the obligations under clauses 8 and 9 of the contract, as imposed upon you by clause 3 of the inducement letter dated 11 May 2006.”
122.
Shortly thereafter Ms Ackroyd
herself became a news story. We
were told that there were newspaper stories about her being a “tax cheat”,
although we were not taken to any specific stories. We stress that HMRC have
never suggested that is the case, or that Ms
Ackroyd
has ever acted in any way
dishonestly.
123.
Ms Ackroyd
did not recall receiving any “inducement letter” from
the BBC. The existence of an inducement letter was also referred to in
subsequent letters from Ms Thomas to Ms
Ackroyd
on 12 and 14 March 2013. It is
true that Ms
Ackroyd
did not question the existence of an inducement letter in
her replies dated 12 and 13 March 2013 and 5 April 2013. She did however
question the reasons given by the BBC for withdrawing her from presenting
duties. In particular she maintained that whilst there was a routine enquiry by
HMRC, her tax affairs and those of CAM Ltd were perfectly in order, and no tax
demand had been made by HMRC.
124. HMRC relied on the existence of an inducement letter but they were unable to produce a copy. What was produced in evidence was said to be an example of a standard inducement letter from a broadcaster to the BBC in 2006 and read as follows:
“BBC NEWS
CONTRACT FOR TRADING WITH SERVICE COMPANY FOR SERVICES OF BROADCASTER
FROM:
TO: BRITISH BROADCASTING CORPORATION
Dear Sirs,
In order to induce you to enter into an Agreement with Limited (hereinafter referred to as ‘the Lender’) dated the day of 2006 (‘the Agreement’) for the rendering of my services as a broadcaster and in consideration of your execution and delivery thereof I the undersigned hereby:
1. …
2. …
3. Subject to all the terms and conditions thereof agree to render all of the services therein required of me and to be bound by and duly perform and observe each and all of the terms and conditions of the Agreement requiring performance or compliance on my part .
…
SIGNED by
In the presence of:”
125.
Ms Ackroyd
had taken legal advice in relation to her responses in
March and April 2013. Whilst her responses did not question the existence of an
inducement letter her evidence was that she did not recognise the example and
had no recollection of receiving such a letter. She was sure that she had not
signed such a letter. The only contemporary correspondence at the time the
Contract was signed was a formal letter from a BBC lawyer in the BBC Talent
Rights Group dated 11 May 2006 enclosing a signed copy of the Contract. There
was no reference to any inducement letter of the same date.
126.
We note that the example of an inducement letter was headed BBC
News, whereas Ms Ackroyd’s
contract negotiations were with BBC Talent. In the
absence of any copy of an inducement letter or any evidence from Ms Thomas as
to what caused her to think that there was an inducement letter we are not
satisfied that Ms
Ackroyd
did sign or send any inducement letter to the BBC.
127. On 28 June 2013 the BBC Litigation Department wrote to CAM Ltd terminating the Contract. The BBC relied on Clause 13.1 of the Contract on the basis of a material breach of Clause 9.1 of the Contract dealing with conflicts of interest. In particular the BBC relied on:
(1)
Determinations by HMRC that CAM Ltd and Ms Ackroyd
had failed to account
for tax and national insurance in accordance with the IR35 Legislation.
(2) The making of inappropriate claims for relief from tax in relation to expenditure incurred.
(3) The making of inaccurate representations to HMRC.
(4) An unauthorised personal appearance at an event allowing the Look North brand to be used in advertising amounting to a breach of the Editorial Guidelines.
(5) Accepting invitations to at least one event without obtaining prior consent of the BBC
128.
It is not part of our role in this appeal to make any finding as
to whether there was a material breach of the Contract by Ms Ackroyd,
and we
say nothing about whether the Contract was validly terminated.
129.
HMRC again relied on Ms Ackroyd’s
failure to question the BBC’s
reliance on the Editorial Guidelines as recognition that she was bound by the
Editorial Guidelines. It is notable that Ms
Ackroyd
did not dispute in her
response that she was bound by the Editorial Guidelines. However, Ms
Ackroyd
was having to deal with the media fallout. She also understood that Ms Thomas
had described her as “toxic”. She had become isolated. We can understand that
Ms
Ackroyd’s
main concern was to refute the fact that her integrity was being
questioned. We do not treat Ms
Ackroyd’s
responses to correspondence referring
to the Editorial Guidelines as an acceptance by her that she was contractually
bound by them.
Reasons
130. It is worth re-stating at this stage the principal issue which we must decide as follows:
“ If the services provided by Ms Ackroyd
were provided
under a contract directly between the BBC and Ms
Ackroyd,
would Ms
Ackroyd
be
regarded for income tax purposes as an employee of the BBC?”
(1) General approach
131. There was no real disagreement as to the principles we should apply in determining this issue. We were referred to a number of relevant authorities. There is no statutory definition of employee or employment in this context. The classic statement on the conditions required for a contract of service is that of MacKenna J in Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 at 515:
“ (i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master. (ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other’s control in a sufficient degree to make that other master. (iii) The other provisions of the contract are consistent with its being a contract of service.”
132. The first condition is what is known as “mutuality of obligation”. The second condition is that of control to a sufficient degree. The third condition operates as a negative condition. If the first two conditions are satisfied, the contract will be a contract of employment unless there are other provisions of the contract which are inconsistent with that conclusion and of sufficient importance that the Tribunal can conclude that the contract is not one of service (see Ready Mixed Concrete at p516 to 517 and Weightwatchers (UK) Ltd v HMRC [2012] STC 265 per Briggs J at [41] to [42] and [111]).
133. The mutuality of obligation to perform personally work offered and to pay remuneration is the “irreducible minimum ... necessary to create a contract of service” (see Carmichael v National Power Plc [1999] 1 WLR 2042 at 2047). The requirement of mutuality will be satisfied where there is a contractual requirement on the employer to provide payment, in the nature of a retainer for a minimum number of hours per year, irrespective of whether those hours are actually worked (see Usetech Ltd v Young at [64]).
134. The right of control in respect of what is to be done, and where when and how it is to be done is an important indicator of an employment relationship, but is not by itself decisive. The key question in this regard is not whether in practice the worker has actual day to day control over his own work, but whether there is, to a sufficient degree, a contractual right of control (see White v Troutbeck [2013] IRLR 286 at [40]-[43] per Richardson J, upheld in the Court of Appeal at [2013] IRLR 949, and Morren v Swinton and Pendlebury BC [1965] 1 WLR 576). The question whether control is “sufficient” for this purpose must take into account the practical realities of a particular industry, considering those aspects of the performance of work that could be controlled in that industry.
135. The significance of control was considered by the Court of Appeal in Montgomery v Johnson Underwood Ltd [2001] EWCA Civ 318. That was a case of an agency worker seeking to establish that she was an employee of the agency. Buckley J (with whom Brooke and Longmore LJJ agreed) considered the position of employees with a high degree of autonomy. He stated as follow at [19]:
‘The question is not whether in practice the work was in fact done subject to a direction and control exercised by any actual supervision or whether any actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter's order and directions.’”
136. The same point was made by Vinelott J in Walls v Sinnett [1987] STC 236 at p246c in relation to a professional singer who lectured in music at a technical college:
“ The other point that was very much stressed by the taxpayer is the modest degree of control which in practice was exercised by the governors and the principal of the college. In some contexts the degree of control exercised may be very important in deciding whether someone is an employee or servant, but in the case of a senior lecturer at a college of further education, more particularly one who like the taxpayer came into teaching from active work as a singer, it is not surprising to find that he was given a very wide degree of latitude in the organisation of his work and time.”
137. In identifying whether there is a right of control, the starting point is the express terms of the contract. If the express terms do not answer the question, then it is necessary to consider the implied terms of the contract (see Ready Mixed Concrete at p516A).
138. Absence of control as to the detailed way in which work is performed is not inconsistent with the employment of a skilled person (see Morren v Swinton and Pendlebury Borough Council [1965] 1 WLR 576 per Lord Parker CJ at 582A-C; Lee Ting Sang v Chung Chi-Keung [1990] 2 AC 374 per Lord Griffiths at 384A; and Montgomery v Johnson Underwood Ltd [2001] EWCA Civ 318 per Buckley J at [19]). The significance of control is that the employer can direct what the employee does, not necessarily how he does it (see Various Claimants v Catholic Child Welfare Society & Ors [2012] UKSC 56 per Lord Phillips at [36].
139. If the genuine contractual right of control to a sufficient degree does exist, it does not matter whether that right is actually exercised (see Autoclenz v Belcher [2011] UKSC 41 per Lord Clarke at [19]).
140. In E v English Province of Our Lady of Charity [2012] EWCA Civ 938 at [76] Ward LJ said that the question of control is not merely about the legal power to control, but that it should be viewed more in terms of accountability and supervision by a superior. That was said in the context of vicarious liability of the Church for sexual abuse by priests. In our view Ward LJ was not suggesting here that the legal power to control was less important.
141. Mr Summers relied on the Court of Appeal decision in Cowell
v Quilter Goodison & Co Limited (1989) IRLR 392. That was a case
involving an equity partner in a firm of stockbrokers, and it was held that he
was not an employee for the purposes of unfair dismissal rules. The Master of
the Rolls said that as an equity partner “[he] was not the servant of anyone”.
Mr Summers suggested we should look to see whether Ms Ackroyd
was a servant and
submitted that she was not. However, the Master of the Rolls also described the
terms ‘master’ and ‘servant’ as old terms and emphasised that it was the nature
of the relationship that was important and not the terminology. We agree with
Mr Tolley that in the light of subsequent authorities (see for example Various
Claimants v Catholic Child Welfare Society at [36]) the question of whether
an individual “looks like a servant” is not a helpful test.
142. It was recognised in Ready Mixed Concrete that the right to provide a substitute to carry out work is inconsistent with a contract of service. Again, it is the right to provide a substitute that is relevant. It does not matter that the right in practice was not used (see Autoclenz Ltd v Belcher at [19]). The existence of a right to substitute is not determinative of self-employment (see Usetech Ltd at [53]). Mr Summers also accepted that the absence of a right to provide a substitute may suggest employment, but again it is not determinative (see R (atao Professional Contractors Group Ltd) v IRC per Burton J at [48v]).
143. Long term contracts where the whole or substantially the whole of the individual’s working week is devoted to performing the services tend to suggest employment (see Usetech Ltd at [59]). Hall v Lorimer [1992] 1 WLR 939; [1994] 1 WLR 209 was a case involving a freelance vision mixer who was found to be self employed. At 945B Mummery J viewed as relevant the degree of continuity in the relationship, how many engagements are performed and whether they are performed mainly for one person. He also considered it useful to consider whether the person performing the services was ‘part and parcel’ of the organisation of the other party. Similarly, at 218C Nolan LJ in the Court of Appeal suggested that the extent to which the individual was dependent upon or independent of a particular paymaster and the duration of engagements may be significant. Further, it is not inconsistent with a contract of employment that the individual is free to work for others (see Market Investigations Ltd v Minister of Social Security [1969] 2 QB 173 at 186G).
144. In Market Investigations Ltd, Cooke J suggested at 184G that the question of whether a worker is an employee could be answered by determining whether the individual who performs the services is performing them as a person in business on his own account. There is no exhaustive list of factors, but he identified a number of relevant factors at 185A-B as follows:
(1) whether the worker provides his own equipment;
(2) whether he hires his own helpers;
(3) what degree of financial risk he takes;
(4) what degree of responsibility for investment and management he has; and
(5) whether and how far he has an opportunity of profiting from sound management in the performance of his task
145. Financial risk involves the ability to earn a profit or make a loss from how the work is performed (see for example Global Plant Ltd v Secretary of State for Social Security [1972] 1 QB 139 per Lord Widgery at 152). In this context, the risk only of not being able to find alternative employment is not a relevant factor as it is a risk shared by all casual employees (see Lee Ting Sang v Chung Chi-Keung at 384D).
146. In the case of a profession or vocation the question of whether the individual is in business on his own account may not be very helpful. In such cases a significant factor may be the extent to which the worker is dependent upon the client for financial exploitation of his talents; conversely whether the worker is able to exploit his talents in the wider market and to a number of clients (see Hall v Lorimer per Nolan LJ at 218).
147. It is not appropriate to adopt a mechanistic or ‘check list’ approach. Different factors will have difference significance and weight in each case. Having considered all the relevant factors, it is necessary to stand back from the detail and make a qualitative assessment of the facts as found (see Hall v Lorimer per Nolan LJ at p216, approving the views of Mummery J in the High Court).
148. Each case must be determined on its own facts. However, Mr Tolley relied on a decision of the Employment Appeal Tribunal in ABC News Intercontinental Inc v Gizbert EAT (21 August 2006) (unreported). The EAT concluded that a contract which provided for ABC to provide 100 days’ work to an experienced journalist, or at any event 100 days’ pay at agreed rates, involved mutuality of obligation (see [21]-[22]). It also concluded that the contract was one of service, notwithstanding the purported description of the contract as for the provision of freelance services. The conclusion took into account, amongst other matters the degree of control exercised, the individual’s place within the organisation, the restrictions on working for competitors and a requirement to keep the company informed of commitments outside the agreement (see [23]).
149. Mr Summers referred us to a number of decisions of the Special Commissioners and the First-tier Tribunal, albeit they are not of course binding on us. He referred us to Lewis t/a MAL Scaffolding v Revenue & Customs Commissioners [2006] STC (SCD) 253, Paya Ltd v HMRC [2016] UKFTT 660 (TC) and Tomlinson v Revenue & Customs Commissioners [2017] UKFTT 0489 (TC). Paya Ltd was a similar case to the present involving BBC presenters but the decision concerned a procedural point which does not assist us, although incidentally it does indicate the BBC’s position of not wishing to be aligned with HMRC or the appellant. Lewis and Tomlinson were both decided on their own facts, applying the authoritative principles set out by the higher courts to their own facts. Again, they do not give us much assistance.
(2) The Hypothetical Contract
150.
In identifying the terms of the hypothetical
contract the stated intentions of the parties, in this case Ms Ackroyd,
CAM Ltd
and the BBC, cannot prevail over the true legal effect of the actual
agreements. This point was considered by Henderson J in Dragonfly
Consultancy Ltd v Revenue & Customs Commissioners [2008] EWHC 2113 (Ch)
as follows:
“ 53. … statements by the parties disavowing any intention to create a relationship of employment cannot prevail over the true legal effect of the agreement between them. It is true that in a borderline case a statement of the parties' intention may be taken into account and may help to tip the balance one way or the other: see Ready Mixed Concrete ([1968] 2 QB 497 at 513) and Massey v Crown Life Insurance Co [1978] 2 All ER 576, [1978] 1 WLR 676. In the majority of cases, however, such statements will be of little, if any, assistance in characterising the relationship between the parties.
55. I would not, however, go so far as counsel for HMRC who submitted that, as a matter of law, the hypothetical contract required by the IR35 legislation must be constructed without any reference to the stated intentions of the parties. If the actual contractual arrangements between the parties do include statements of intention, they should in my view be taken into account, and in a suitable case there may be material which would justify the inclusion of such a statement in the hypothetical contract. Even then, however, the weight to be attached to such a hypothetical statement would in my view normally be minimal, although I do not rule out the possibility that there may be borderline cases where it could be of real assistance.”
151.
There was no issue between the
parties that the hypothetical contract with which we are concerned in the
present appeal is based on the terms of the Contract, with Ms Ackroyd
herself
agreeing to provide those services to the BBC on the terms set out in the
Contract. We are satisfied that the hypothetical contract contained the
following terms derived from the Contract:
(1) The contract was for a term of 7 years pursuant to clause 2, terminable only pursuant to clause 13.
(2)
Ms Ackroyd
was contractually obliged
to perform the services in clause 3 and the BBC was contractually obliged to
pay the fees set out in the payment Schedule in monthly instalments. If Ms
Ackroyd
failed to perform the services including a minimum of 225 days for Look
North then the fees would reduce proportionately.
(3)
The BBC was not bound to call on the
services of Ms Ackroyd
but it remained liable to pay the fees pursuant to
clause 6 where it did not.
(4)
The BBC was entitled to edit Ms
Ackroyd’s
contributions to Look North and other contributions pursuant to
clause 5.
(5) Travel and subsistence expenses would be reimbursed as for freelance contributors, together with a clothing contribution of £3,000 per year.
(6)
There were no set hours or set working
days, subject to Ms Ackroyd
being available to present Look North at 6.30pm as
required by the BBC. There was no set location where Ms
Ackroyd
would work,
either in the studio or on an outside broadcast.
(7)
Ms Ackroyd
was subject to the
restrictions in clause 8 and clause 9. Otherwise she was entitled to undertake
other paid or unpaid activities outside the BBC.
(8)
Ms Ackroyd
was not contractually bound
by the Editorial Guidelines. She did not have an identified line manager and
was not subject to formal appraisal procedures.
(9)
Ms Ackroyd
had no right to provide a
substitute to perform the services and was expressly prohibited from doing so
by clause 18.
(10) There was no express provision for payment of holiday pay, sick pay or pension entitlement.
152. Mr Summers submitted that there were also terms of the hypothetical contract as follows:
(1)
Ms Ackroyd
would control stories
covered, how they would be presented, who should be interviewed and whether
there should be an outside broadcast.
(2)
Ms Ackroyd
could make such changes to
the Look North format as she wanted.
(3)
Ms Ackroyd
could develop human
interest stories of her own for future screening.
153. Based on our findings of fact we are not satisfied that these were terms of the hypothetical contract. These were matters in which she was subject to direction by the BBC.
154.
Mr Summers also relied on the
intentions of the parties that Ms Ackroyd
should be employed by CAM Ltd and not
by the BBC. We have found that was the intention of the parties. The services
provided by Ms
Ackroyd
are described in Clause 3 as “freelance services”.
However, for the reasons which follow we do not regard this as the borderline
case that Henderson J had in mind when he suggested that the intentions of the
parties may tip the balance.
155.
The burden is on CAM Ltd to establish
facts that support its case that the hypothetical contract was a contract for
services and not a contract of service. Ms Ackroyd
criticised HMRC for the fact
that during their enquiry they declined to approach certain BBC employees who
would have been able to confirm facts to support her case. However, CAM Ltd
could have adduced evidence from those persons in the present proceedings,
obtaining a witness summons if necessary. The same applies to Mr Summers
criticism of HMRC for not calling Mr Pannett to give evidence. If he considered
that Mr Pannett had material evidence to give then again CAM Ltd could have
applied for a witness summons.
156. The task we have to perform in deciding the principal issue in this appeal is essentially a balancing exercise taking into account all the factors described above. Some factors will have more weight than others.
(3) Mutuality of Obligation
157.
It was not in dispute that a
pre-requisite for a contract of employment was present, namely mutuality of
obligation. Ms Ackroyd
was required to work for the BBC for at least 225 days
in any one year, and the BBC was required to pay the fees set out in the
Contract. Mr Summers submitted that this was a neutral factor. We agree it is
not a factor which points one way or the other. It is the “irreducible minimum”
which must be present if a contract is to be construed as a contract of
employment. We are satisfied that it is present in the hypothetical contract.
(4) Control
158.
HMRC confirmed their
determinations and decisions in a letter dated 19 August 2016. In that letter
the right of control was described as a “crucial factor”. In submissions to us
Mr Tolley relied on control but he accepted that the BBC could not control the
words which Ms Ackroyd
chose to use during a live television programme. He
submitted that she was given and exercised a professional discretion which was
not inconsistent with control over Ms
Ackroyd’s
work residing with the BBC.
159.
Mr Tolley submitted and we
accept that it is a necessary premise of clause 1 of the Contract that Ms
Ackroyd
was subject to the control of CAM Ltd. It states in terms that “The
Company [CAM Ltd] controls the services of Christa
Ackroyd”.
It is clearly
possible therefore to control someone in the role Ms
Ackroyd
was performing at
the BBC.
160.
Clause 3 of the Contract gave
the BBC first call on the services of Ms Ackroyd
“as it may require”. We
consider that the reference to what the BBC may require was a reference to such
of Ms
Ackroyd’s
services that it may require, whether as presenter, reporter or
providing reasonable ancillary services, for example assisting with the editing
of material. The BBC could direct which of those services it required Ms
Ackroyd
to perform. The BBC could also require Ms
Ackroyd
to attend and
represent the BBC at public events pursuant to clause 3.3.
161.
Ms Ackroyd’s
evidence was that she
would never have entered into a contract with the BBC if it meant that the BBC
would control the way in which she worked. However, we are concerned with the
hypothetical contract. At most this has only marginal relevance in a finely
balanced case as a statement of intention.
162.
Ms Ackroyd
maintained that the BBC was obliged to accept and act
upon her suggestions. We do not accept that evidence. There is no express term
to that effect in the Contract. Further it is inconsistent with the terminology
used by Ms
Ackroyd
when describing her role in her witness statement. We have
found that the Editorial Guidelines were not incorporated as terms of the
hypothetical contract, but they do form part of the context in which we must
construe the hypothetical contract. In our view it would be inconsistent with
the Editorial Guidelines if Ms
Ackroyd
were to have control over the content of
Look North or her contribution to the programme as submitted by Mr Summers. It
seems unlikely to us that the BBC would give Ms
Ackroyd
an entirely free role
in Look North without at least an expectation that in carrying out her work she
would abide by the Editorial Guidelines. It was not necessary for the BBC to
bind Ms
Ackroyd
contractually to the Editorial Guidelines because it was
entitled to direct what work she did and how she did it. Much would be left to
her professional judgement but if the BBC considered that she was breaching the
Editorial Guidelines in a material way then in our view it could direct her to
work in a way consistent with the Editorial Guidelines.
163.
We accept that the BBC did implement changes suggested by Ms
Ackroyd,
but there is no evidence that Ms
Ackroyd
would have the last word on
the implementation of changes. There are no real examples of her having the
last word, except in one instance where there was a difference of opinion as to
how she should describe three murder victims. We do not consider that example
carries much weight.
164.
We are not satisfied that as a matter of contractual obligation
the BBC was in any sense required to act on Ms Ackroyd’s
direction. If that was
the intention of the parties at the time the Contract was negotiated then we
have no doubt that express provision would have been made to that effect. In
practice, the BBC did act on Ms
Ackroyd’s
advice and suggestions. That is
because she was an experienced, professional and successful television
journalist and presenter. CAM Ltd was engaged and the contract renewed because
Ms
Ackroyd
possessed such qualities.
165.
Mr Summers relied on the fact that Ms Ackroyd
had no line manager
and was not subject to the BBC appraisal procedure. Looked at in isolation this
may suggest that the BBC did not control Ms
Ackroyd’s
work. Looked at in
context, however, for the reasons given we are satisfied that the BBC did have
ultimate control over what work Ms
Ackroyd
did and how she did it. There was no
evidence of examples where they exercised such control but we consider that as
a matter of contract they were entitled to do so. It is consistent with the
fact that the BBC were expressly entitled to edit Ms
Ackroyd’s
contributions.
166.
Mr Summers submitted that HMRC viewed Ms Ackroyd’s
role pursuant
to the hypothetical contract as simply a newsreader. He accepted that if that
were a true reflection of her work then she would properly be treated as an
employee pursuant to the hypothetical contract. We accept that her role was
much more than simply presenting the news and reading a script. Indeed, Mr
Tolley acknowledged as much.
167.
Mr Summers rightly submitted
that the contract had no express term dealing with control. Control of Ms
Ackroyd’s
work pursuant to the hypothetical contract must lie somewhere, either
with Ms
Ackroyd
or with the BBC. We are not satisfied that it lay with Ms
Ackroyd.
We consider that the BBC did have ultimate control in how, where and
when Ms
Ackroyd
carried out her work. We accept a submission by Mr Tolley that
this was an implied term of the hypothetical contract in order to give that
contract business efficacy. In the context of Ms
Ackroyd’s
role it was necessary
for the BBC to at least have the power to direct Ms
Ackroyd’s
work, otherwise
Look North as a programme ran the risk of not complying with the Editorial
Guidelines. For example, if Ms
Ackroyd
consistently failed to comply with the
Editorial Guidelines, it is inconceivable that the parties intended that the
BBC should be obliged to continue to pay Ms
Ackroyd
for her work even if as a
result she was not called on to present Look North.
(5) Other Relevant Factors
168.
There was no right pursuant to
the hypothetical contract for Ms Ackroyd
to provide a substitute. In fact, the
hypothetical contract went further and expressly provided that Ms
Ackroyd
could
not provide a substitute. We accept Mr Summers submission that this is not
determinative of the issue and Mr Tolley did not suggest that it was
determinative. Mr Summers acknowledged that it was a pointer towards an
employment contract. We agree that it points towards employment, but it is not
a significant factor. In the context of the anchor of a current affairs
programme, whether or not that person is self-employed it is unlikely that they
would be entitled or expected to provide a substitute save possibly where
production of the actual programme was being contracted out. That was not the
position here.
169.
Ms Ackroyd
was inevitably seen
as a part of the BBC because she presented a nightly news and current affairs
programme. However, an external observer would not know the details of the
hypothetical contract. Ms
Ackroyd
had a BBC email address and for example she
received the round robin email from Mr Thompson. She attended training
seminars. We accept that anyone approaching the BBC to engage her services
would be directed to Ms
Ackroyd.
Further, it was known to those she worked with
that she was entitled to undertake outside activities, although they did not
necessarily know on what terms. It seems to us that Ms
Ackroyd
was to some
extent part and parcel of the BBC, but we do not consider this to be a
significant factor in this case.
170.
It is a relevant factor that Ms
Ackroyd
had the benefit of a 7 year contract. This was unusual at the BBC. Mr
Summers’ argued that the length of the Contract simply reflected the BBC’s
desire to tie Ms
Ackroyd
to a lengthy contract because of the value she added
to Look North, and did not reflect the fact that they regarded her as an
employee. We do not accept that submission. Whether the BBC regarded Ms
Ackroyd
as an employee is of marginal relevance, and in any event we are not satisfied
that they did. She could not be an employee because the BBC had contracted with
CAM Ltd. There is no suggestion that the Contract could ever have established
Ms
Ackroyd
as an employee, unless it was a sham which has never been suggested.
Indeed, we have found that the BBC wanted to contract with a personal service
company to avoid any possibility of Ms
Ackroyd
being an employee. In our view a
hypothetical contract of that length for at least 225 days per year and
terminable only for a material breach points towards a contract of employment.
The existence of a 7 year contract meant that Ms
Ackroyd’s
work at the BBC was
pursuant to a highly stable, regular and continuous arrangement. It involved a
high degree of continuity rather than a succession of short term engagements.
That is a pointer towards an employment contract.
171.
We do not consider that the
fact the fees were payable on a monthly basis akin to the way an employee might
be paid is significant. Nor is the absence of any provision for holiday, sick
pay or pension entitlement. The Contract was between CAM Ltd and the BBC and
both parties accept that the Contract was not an employment contract. It would
not be expected to contain such provisions. Mr Tolley suggested that as a
“worker” Ms Ackroyd
would have a statutory entitlement to such rights, but he
accepted that did not assist the Respondents in establishing whether Ms
Ackroyd
was an employee. Mr Summers relied on the fact that if Ms
Ackroyd
had been an
employee then she would have been entitled to employment rights on the eventual
termination of the Contract. Again, this is not a relevant factor because the
BBC and CAM Ltd were governed by the Contract, and not the hypothetical
contract.
172.
The authorities suggest that it
may be helpful to consider whether Ms Ackroyd
was in business on her own
account. Mr Summers submitted that under the hypothetical contract Ms
Ackroyd
should be seen as being in business on her own account. In particular he relied
on the fact that she was able to profit from sound management of her business
because she was entitled to “success payments” of £15,000 per year if the
ratings of Look North were consistently and significantly in excess of those
for ITV’s Calendar.
173.
It was not realistically
possible for Ms Ackroyd
to make a loss in performing the Contract. She could
increase her income by way of the success fee. We do not regard that result as
being referable to sound management of a business, but from sound performance
of her role in Look North. We are satisfied that the success of Look North was
in large measure due to the changes Ms
Ackroyd
drove, her performance as a
journalist and presenter and the contributions of other team members. As such
Ms
Ackroyd
was not managing a business, but performing her significant role in
the team to a high standard.
174.
Ms Ackroyd
was entitled to
payment of an additional fee of £7,500 for each 6 month period in which the
ratings of Look North exceeded those of Calendar. Mr Tolley referred to this as
a “bonus” whereas Ms
Ackroyd
preferred to describe it as a “success fee”. The
terminology is not important. It was a performance related payment amounting to
approximately 9% of the principal fee payable at the beginning of the Contract
in 2007. We consider that such a performance payment is a neutral factor in our
decision. It is certainly not inconsistent with a contract of employment.
175.
To a limited extent Ms Ackroyd
did provide her own equipment. She used her own laptop and mobile phone. That
is not unusual in the case of an employee. She also had her own Sky subscription.
Otherwise she used BBC equipment to produce her contributions to Look North. It
was not suggested that she invested in her business, other than the investment
of her own expertise. Nor was there significant management of any such
business. She performed professional services but she did not profit from sound
management of a business nor did she take any financial risk as such. The
amount of other work she performed for payment was very small compared with the
fees she received by virtue of the hypothetical contract. It was not a case of
managing a number of separate contracts in addition to the hypothetical
contract. The most significant example of other activities was Ms
Ackroyd’s
contract with Express Newspapers but this was terminated at the time she
entered into the Contract.
176.
We do not consider that Ms
Ackroyd
could fairly be described as being in business on her own account. She
was economically dependent on the hypothetical contract with the BBC which took
up most if not all of her working time.
177.
There were restrictions as to
what other work Ms Ackroyd
could do, subject in some circumstances to consent
from the BBC. We are satisfied that those restrictions did not in practice
prevent Ms
Ackroyd
from undertaking various outside activities that she wished
to pursue, at least until 2013 prior to termination of the Contract. However,
the fact remains that those restrictions were part of the hypothetical
contract. The BBC could refuse permission for any reason and was not obliged to
give reasons.
178.
Mr Summers relied on a
submission that certain well known presenters at the BBC were permitted to work
for other broadcasters. We had no evidence as to the terms on which those
presenters were contracted to the BBC and we do not consider that this adds
anything to Ms Ackroyd’s
case.
Overall Assessment
179.
We must consider all the
factors above and the relative weight attaching to those factors. In our view
the most significant factors in the present case include the fact that the BBC
could control what work Ms Ackroyd
did pursuant to the hypothetical contract.
It was a 7 year contract for what was effectively a full time job. Standing
back and making an overall qualitative assessment of the circumstances we
consider that Ms
Ackroyd
was an employee under the hypothetical contract. If the services provided by Ms
Ackroyd
were provided under a contract directly between the BBC and Ms
Ackroyd,
then Ms
Ackroyd
would be regarded for income tax purposes as an employee of the
BBC.
180.
We acknowledge that this is a value judgement. It is in
the nature of a value judgement that different people may come to different
conclusions. We do not criticise Ms Ackroyd
for not realising that the IR35
legislation was engaged. She took professional advice in relation to the
contractual arrangements with the BBC and she was encouraged by the BBC to
contract through a personal service company.
Tax Relief for Expenditure
181.
CAM Ltd reimbursed Ms Ackroyd
for the costs of her subscription
to Sky TV in tax years 2007-08 to 2011-12. The average cost in those years was
approximately £750 per year. Mr Sutcliffe and Mr Biggin who prepared Ms
Ackroyd’s
accounts and self-assessment tax returns were content for tax relief
to be claimed in relation to these sums.
182.
The BBC did not require Ms Ackroyd
to have a subscription to Sky
TV. The subscription covered various sky channels including Sky Sport and Sky
Movies. Ms
Ackroyd
said that she “deemed it necessary to have access to news
and sport”. Sport and popular culture was part of the Look North programme. For
example, she considered it necessary to know how the Yorkshire County Cricket
team was doing. She did not accept that the subscription was in part for
personal use. Ms
Ackroyd’s
evidence was that she would not often watch television
with her husband. She would go to a separate room keeping abreast of news and
current affairs.
183.
Mr Summers argued that Ms Ackroyd’s
role and working pattern
meant that it was necessary for her to have a Sky TV subscription. She was a
journalist and not just a newsreader. She needed to keep up to date on current
breaking news and to research stories with a regional angle.
184.
We accept that Ms Ackroyd
watched Sky TV in the way she described
but we do not accept that there was no element of personal use and enjoyment.
It seems likely to us and we are satisfied that at least part of the reason for
having a Sky TV subscription was for Ms
Ackroyd
and her husband to enjoy
watching the content at leisure.
185.
It was common ground that the reimbursement of Ms Ackroyd’s
liability to Sky constituted earnings for the purposes of PAYE and NIC pursuant
to section 62 ITEPA 2003. CAM Ltd did not treat the payments as such. The issue
arising is whether CAM Ltd was entitled to treat the payments as being subject
to relief pursuant to section 336 ITEPA 2003 which provides as follows:
“ (1) The general rule is that a deduction from earnings is allowed for an amount if—
(a) the employee is obliged to incur and pay it as holder of the employment, and
(b) the amount is incurred wholly, exclusively and necessarily in the performance of the duties of the employment.”
186. In Fitzpatrick v CIR [1994] 1 WLR 306 the House of Lords was concerned with journalists claiming relief for the cost of purchasing newspapers. It was held that relief was not available. Lord Templeman said this:
“ … in the present cases it seems to me that a journalist does not purchase and read newspapers in the performance of his duties but for the purpose of ensuring that he will carry out his duties efficiently… A journalist who reads newspapers does so in order to be able to perform his duties to the highest possible standard but he does not read in performance of his duties.”
187.
There is no evidence that CAM Ltd required Ms Ackroyd
have a
subscription to Sky TV. More significantly, we are not satisfied that the
amounts spent by Ms
Ackroyd
were incurred exclusively in the performance of her
duties as an employee of CAM Ltd. They were incurred for the purpose of
ensuring that she could carry out her duties efficiently. We are also satisfied
that Ms
Ackroyd’s
object in subscribing to Sky TV included obtaining the
private benefit for herself and her husband of being able to watch the content
at leisure (see Mallalieu v Drummond [1983] 2 AC 861 and MacKinlay v
Arthur Young McClelland Moores & Co [1990] 2 AC 239).
188.
We are satisfied therefore that CAM Ltd ought to have treated the
payments to Ms Ackroyd
as being subject to PAYE and NIC.
189.
CAM Ltd also made payments to Ms Ackroyd
said to be additional
household expenditure arising from the fact that Ms
Ackroyd
had to work from
home.
190.
We are satisfied that Ms Ackroyd
had no desk or computer at the
BBC offices and that she regularly worked from home. She is a journalist and
she has an office at home which she calls ‘the snug’. This is where she would
write her newspaper column and work on stories for Look North. She received
secretarial support paid for by CAM Ltd. She would use the snug as a base to do
her work for the BBC and for her small number of other clients.
191.
During the enquiry HMRC required information from CAM Ltd by way
of a notice pursuant to Schedule 36 Finance Act 2008. That information included
details of the arrangements between Ms Ackroyd
and CAM Ltd for home working,
together with details of the additional household costs incurred by Ms
Ackroyd
from working at home. The information was not provided.
192. Section 316A ITEPA 2003 provides as follows:
“(1) This section applies where an employer makes a payment to an employee in respect of reasonable additional household expenses which the employee incurs in carrying out duties of the employment at home under homeworking arrangements.
(2) No liability to income tax arises in respect of the payment.
(3) In this section, in relation to an employee—
“homeworking arrangements” means arrangements between the employee and the employer under which the employee regularly performs some or all of the duties of the employment at home; and
“household expenses” means expenses connected with the day to day running of the employee’s home.”
193.
There was no evidence of any conscious agreement between CAM Ltd
and Ms Ackroyd
in relation to her homeworking arrangements. More importantly
there was no evidence as to the additional costs incurred by Ms
Ackroyd
as a
result of working from home. In those circumstances we are not satisfied that
relief under section 316A was available. CAM Ltd ought to have treated the
payments to Ms
Ackroyd
as being subject to PAYE and NIC.
Conclusion
194. For the reasons given above we dismiss the appeal in principle, subject to:
(1) any reference to the Tribunal in relation to the quantum of the determinations and decisions concerning the intermediaries legislation, and
(2) any issues which remain outstanding in relation to penalties.
195. The parties shall inform the Tribunal in writing within 42 days from the date of release of this decision whether they wish the Tribunal to determine either of these matters in which case we will give further directions.
196. This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.
TRIBUNAL JUDGE
APPENDIX
Extracts from the Contract
1. THE COMPANY
The Company controls the services of CHRISTA ACKROYD
(‘the Broadcaster’) and agrees to provide the services of the Broadcaster to
the BBC and further agrees with the BBC that it shall observe and perform and
(where appropriate) shall ensure that the Broadcaster observes and performs the
terms and conditions of this Agreement.
2. TERM
This Agreement shall (subject to any other terms providing for prior termination) be for a period of Seven Years from the First day of January Two Thousand and Seven to the Thirty First day of December Two Thousand and Thirteen (‘the Term’).
3. SERVICES
During the Term the BBC shall (subject to reasonable notice) have first call on the freelance services of the Broadcaster (including acting as presenter reporter and reasonable ancillary services normally associated with such a role) as it may require to the output of the BBC, to include in particular:-
3.1 up to Two Hundred and Twenty Five (225) days in each year of this Agreement for the output of BBC Yorkshire
3.2 such days as may be mutually agreed for BBC radio stations in the North region
3.3 attendance at/representation of the BBC at such public events as required by the BBC
3.4 such other contributions as shall be mutually agreed.
5. MORAL RIGHTS
The Company grants the BBC the unlimited right to edit copy alter add to take from adapt or translate all the Broadcaster’s contributions made under this Agreement and warrants that the Broadcaster has waived irrevocably any ‘moral rights’ which he may have now or in the future ….
6. FEE
6.1 In respect of the services of the Broadcaster the rights granted under Clause 4 above and the waiver given in clause 5 above the BBC shall pay to the Company the sums set out in the Schedule hereto during the term which sums exclusive of VAT shall be payable by equal monthly instalments not later than 14 days after the end of the relevant month.
6.2 In the event of the Broadcaster failing for any reason to render the services under this Agreement the payment shall (unless the BBC otherwise decides) be reduced by an amount proportionate to the period during which the Broadcaster failed to render the services.
7. EXPENSES
7.1 The Company shall be entitled to the appropriate BBC travel and subsistence payments for freelance contributors.
7.2 The BBC shall make a contribution of up to Three Thousand Pounds (£3,000) in each contract year to the Broadcaster in respect of the purchase of suitable clothing … subject to the supply of suitable receipts. Beyond this contribution the Broadcaster will be required to provide appropriate contemporary clothing for carrying out the services …
8. ENGAGEMENTS FOR THIRD PARTIES
8.1 During the Term the Broadcaster shall not without the prior written consent of the Head of Regional and Local Programmes, BBC Yorkshire (referred to hereafter as ‘the BBC Representative’ ….) provide services of any kind in respect of any form of television or radio intended for audiences in the United Kingdom of Great Britain and Northern Ireland and the Republic of Ireland or for on-line services for any party other than for the BBC.
8.2 The Broadcaster shall not provide her services for publications of any kind for any party other than the BBC without first obtaining the prior written consent of the Head of BBC Yorkshire.
9. CONFLICTS OF INTEREST
9.1 The Company acknowledges that the BBC under its Agreement with the Secretary of State for Culture Media and Sport has given certain undertakings in relation to Programme Standards including in particular impartiality and accordingly agrees in furtherance of the mutual interest of the BBC and the Broadcaster that the Broadcaster will not engage in any conduct which compromises or calls into question the impartiality or integrity of the BBC or any of its programmes or the Broadcaster and in particular without limitation thereto the Broadcaster will not without the prior written consent of the BBC Representative
9.1.1 be involved or associated in any way with any person or organisation which has a trading relationship with the BBC its subsidiaries or associates or which is itself or in association with others in competition with the BBC its subsidiaries or associates or which is tendering for work from or which supplies goods or services to the BBC its subsidiaries or associates
9.1.2 provide training in how to be interviewed for radio or television#
9.1.3 be publicly associated with the work of any charity or government initiative …
11. WARRANTIES
The Company warrants that:-
11.1 there is no other contract or engagement or other reason (including prior conduct) which would inhibit or prevent the Broadcaster from entering into or fulfilling the terms of this Agreement
11.2 the Broadcaster’s contributions under this Agreement are and will be the Broadcaster’s original work and do not and shall not contain anything which is an infringement of copyright or related rights or which is defamatory or which may bring the BBC into disrepute …
12. INDEMNITY
The Company shall at all times keep the BBC fully indemnified in respect of any consequences which may ensue upon breach of any of the warranties given by the Company pursuant to Clauses 11 and 5 hereof
13. TERMINATION
13.1 If the Company or the Broadcaster shall commit a material or irremediable breach of this Agreement … then the BBC shall have the right to terminate this Agreement forthwith …
14. ENHANCEMENT OF REPUTATION
The BBC shall not be obliged to call on the services of the Broadcaster hereunder or to use all or any of the Broadcaster’s contributions and if it does not do so it shall not be liable to the Company or to the Broadcaster for any loss or damage suffered by the Company or the Broadcaster …
18. ASSIGNMENT
The Company shall not assign transfer charge or deal in any other manner with this Agreement or sub-contract any or all of the Broadcaster’s obligations under it.
…
THE PAYMENT SCHEDULE
(referred to in clause 6.1)
A 1st January 2007 to 31st December 2007
One Hundred and Sixty Three Thousand Two Hundred and Thirty Three Pounds (£163,233) which shall be payable via equal monthly instalments in arrears
[B-G contain provision for annual increases (if any) in the Retail Prices Index in the previous year up to 1st January 2013 to 31 December 2013]
H In addition the BBC agrees to make payment to the Company of Seven Thousand Five Hundred Pounds (£7,500) at the end of June and the end of December in each year of this Agreement SUBJECT TO the programming of the Broadcaster consistently and significantly exceeding the ratings of its commercial competition (in the opinion of the BBC) over the relevant preceding Six Month period.
which sums are all expressed as exclusive of VAT.