Kaye Adams’s case proves it’s time for a Taxpayers’ Bill of Rights

kaye adams
Ms Adams was made to fight a long and expensive battle to prove she wasn’t a tax dodger - James Stack/ITV Studios

Last week, The Telegraph reported on the outcome of the tribunal decision on presenter Kaye Adams.

In summary, Ms Adams operated for many years as a self-employed presenter for a wide range of different customers. In 2007 she was advised to set up a company to provide her services. This was, and remains, a common arrangement for contractors including many of those working with the media. Indeed, it was often a requirement made by their customers.

This arrangement is entirely legal. Readers will have views on whether or not this was “tax dodging” but that was a matter for the first tribunal to decide.

HMRC challenged her arrangement as falling within the intermediary legislation rules, in place since April 2000, usually referred to as “IR35”.

She took her case to the First Tier Tribunal (FTT) where she was successful. HMRC appealed to the Upper Tribunal – she won again. HMRC appeal then went to the Court of Appeal where the judges ruled against HMRC on most, but not all of the issues. They said previous judges had misapplied the rules and returned the matter to FTT, where the judges again ruled in favour of Ms Adams.

I have read through all 206 pages of the impressive judicial decisions in detail. I felt for the judges wading through all this which had similarities to those medieval scholars debating how many angels would fit on a pinhead – reconfirming my view that the IR35 rules are an unworkable mess.

Ms Adams’s case has gone on for nine years and still remains open for HMRC to seek appeal yet again. Last week she explained the toll it has taken on her over the near decade that the saga has rumbled on.

Taxpayers are at a substantial disadvantage to HMRC, which has access to the best tax barristers in the country at heavily discounted rates.

It also has virtually limitless resources funded by taxpayers. Private taxpayers, however, have to rely on their own resources. Contesting a tax demand at the First Tier Tribunal on a case like this will cost about £50,000 in professional fees. Even if you win, these costs are not recoverable.

Ms Adams was awarded her costs at the Upper Tribunal (UT). But, despite winning most of the arguments at the Court of Appeal, the judges demanded the UT costs should be repaid and then charged her with all the costs of the appeal.

I do not understand why they did this and nor can anybody else I have spoken to. Nevertheless, following her win last week she has been left to carry all the costs, which by now amount to around £200,000. This compares with the disputed tax of around £70,000.

At this latest tribunal HMRC were represented by three barristers, including King’s Counsel, backed up by HMRC lawyers and staff. Ms Adams was represented by two barristers, Keith Gordon and Ximena Montes Manzano, who won the appeal for her.

When The Telegraph asked HMRC for a comment they said they were “disappointed “with the decision.

I received a similar response last month concerning another case where the judges decided that HMRC had been applying the law incorrectly for the last 58 years.

In my view it is not the role of HMRC to treat these cases as some kind of contest to be won or lost. It is its job to ensure that their customers pay the right amount of tax as required by law.

When the judges decided that HMRC were attempting to apply the law incorrectly to Ms Adams, surely the proper HMRC response should have been to thank the judges for explaining the rules, apologise to Ms Adams and offer to reimburse her for all her costs. When I invited HMRC to comment on this they responded with their previous statement.

There are many fine people at HMRC correctly using their powers to identify and challenge tax avoidance – but something went badly wrong in this case.

In my view it raises fundamental questions about the protection of basic taxpayer rights. It surely cannot be right that HMRC is allowed to keep appealing over and again until the individual taxpayer, broken financially or mentally, has to give up.

For many years HMRC has been required to operate under the Taxpayers Charter, since 2009 a legal statute. Among many obligations, it requires HMRC to work within the law to ensure everyone pays the right amount of tax and to help taxpayers reach an appropriate outcome quickly and simply.

Dave Chaplin, of the tax advisory firm IR35 Shield and who helped Ms Adams throughout, is running a campaign called Taxpayer Fairness. The campaign seeks to introduce American-style laws for taxpayers’ rights into UK statute.

The Taxpayers’ Bill of Rights would enshrine in law some of the principles in the HMRC litigation and settlement strategy, and also provide an independent taxpayer advocate to ensure the correct rules were followed.

This is an idea we really should be exploring, particularly because those rules may have prevented the unfortunate mistakes made in Ms Adams’ case.

Mike Warburton writes a weekly tax column for the Telegraph. Previously a director at Grant Thornton, he is now retired. You can ask questions by emailing


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