Wrong approach to third RMC stage test

During the period from 6 April 2012 to 5 April 2017 television and radio presenter Adrian Chiles provided his services to the BBC and ITV through a personal service company – Basic Broadcasting Ltd (BBL).

HMRC issued assessments for the years 2012-13 to 2016-17 saying BBL owed income tax and National Insurance under the intermediaries legislation (ITEPA 2003 s 48 to s 61). It claimed that the hypothetical contracts between the third parties and Mr Chiles were contracts of service (employment).

The First-tier Tribunal allowed the taxpayer’s appeal. HMRC appealed. It claimed the First-tier Tribunal had erred in law in its application of the third stage of the test in Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 (RMC). Broadly the First-tier Tribunal had focused on whether Mr Chiles was in business on his own account and whether the...