HMRC had brought a case against the presenter under IR35 legislation after a crackdown on personal service companies, which she had used. Lorraine signed a contract to present ‘Lorraine’ in 2012, through the limited company - Albatel Ltd, which she runs with her husband.

HMRC argued that Kelly had claimed her agents’ fees as tax deductible and as an employee of ITV she was not entitled to do so. The deduction is only permitted for “theatrical performers” (classed as actors, musicians, singers, dancers or theatrical artists).

However, Lorraine Kelly claimed she was not an employee of ITV and was in fact an “entertainer” and her smiley, chatty persona was part of her brand. She stated to the tribunal that she played a version of herself on the show and drew comparisons to an actor appearing in a West End show for 12 months.

Lorraine Kelly argued that she was a freelancer, as she decides on the content of her show, does not receive sick pay or a pension from ITV and has no guarantee that her contract will be renewed.

The Ruling

Judge Jennifer Dean believed that Lorraine could be classed as a "theatrical artist", which would mean any payments to an agent would be allowed as a tax-deductible expense.

The judge also stated: "We did not accept that Ms Kelly simply appeared as herself - we were satisfied that Ms Kelly presents a persona of herself, she presents herself as a brand and that is the brand ITV sought when engaging her.

"All parts of the show are a performance, the act being to perform the role of a friendly, chatty and fun personality.

"Quite simply put, the programmes are entertaining, Ms Kelly is entertaining, and the 'DNA' referred to is the personality, performance, the 'Lorraine Kelly' brand that is brought to the programmes."

She added: "We should make clear we do not doubt that Ms Kelly is an entertaining lady but the point is that for the time Ms Kelly is contracted to perform live on air she is public 'Lorraine Kelly'.

"She may not like the guest she interviews, she may not like the food she eats, she may not like the film she viewed but that is where the performance lies."

What does this mean?

Having lost the £1.2m tax case HMRC has stated it was “disappointed”.  However, it does show the importance of looking into professional IR35 advice and protection. It is advisable to ensure that IR35 reviews are conducted for any contract that a contractor engages in.

(Source: Gorilla Accounting)

The Apprentice recently returned for a 14^th series, as 16 entrepreneurs and impresarios battle it out to win a significant investment in their respective business ventures from Lord Alan Sugar.

Creditsafe analysed the key financial data of each contestant to identify which hopeful is the real winner when it comes to business success, with former ‘Young Entrepreneur of the Year’ and ‘Media Disrupter of the Year’ Jackie Fast coming out on top.

To rank the business acumen of this year’s Apprentice candidates, Creditsafe devised a scoring model that considered the profitability of companies they've worked at, their history as directors, a current ratio of their total business assets and current liabilities, their credit score, County Court Judgments against candidates and finally, their net worth.

Jackie started her first business, Slingshot Sponsorship, in her bedroom in 2010, with only a laptop and a budget of £2,000. Six years later the business had expanded into a number of international markets and boasted a client list that included Shell, Red Bull, Richard Branson and the Rolling Stones. She later sold the business in 2016 to the Marketing Group plc for millions, having grown the company’s net worth from £23,153 in 2013 to £243,239 in 2016.

Jackie also serves as a Non-Exec Board Director of the European Sponsorship Association, one of the youngest in the association’s 30-year history. Her latest business venture is REBEL Pi, a rare Canadian ice wine brand focused on the UK market. Now a public speaker and author, her first book ‘Pinpoint’ was published in 2017, exploring the effectiveness of sponsorship in driving business growth.

Creditsafe’s data also indicates that this year’s runner-up is Kayode Damali, a 26-year-old motivational speaker and former director of the National Union of Students (NUS), making him the only contestant to have worked in a business outside of the SME space. During his time at the NUS, Kayode was appointed as a director, with the organisation producing revenues in excess of £19 million.

David Walters, group data director at Creditsafe, said: “When compared to last year, it’s clear that the slate of contestants this time around have had significantly less board level experience prior to coming onto the show. It will be interesting to see whether experience really does pays off when the contestants battle it out to be crowned the winner of this year’s Apprentice.

“From our experience, the background and past success of business leaders is an important indicator of future success. Before entering into any partnership with a new company, it’s important to do due diligence on who you’ll be doing business with and how they have performed in the past. There’s no doubt Lord Sugar will be grilling the contestants and doing his own research to ensure he picks the right apprentice.”

(Source: Creditsafe)

Video streaming services such as Netflix and Amazon Prime have now been reported to have more subscribers than traditional pay-per-view TV services in the UK, according to new figures released by Ofcom. This of course also applies on a global scale, in the US and beyond.

This week Finance Monthly asked experts in the media industry, communications sector and markets experts what they thought of the proliferation of online streaming services and their impact on traditional TV.

Luke McDowell, Context Public Relations:

Netflix is a brilliant example of a business that adapted and reinvented itself to become not only a giant of the streaming world, but the television and film industry as a whole. It is of no surprise that streaming service subscribers now outnumber the traditional pay TV subscribers.

British television has lagged behind the streaming services for a while now, it’s no longer enough to make your programming available on catch-up, you must now realise the market need for ‘binge-watching’; as this is where Netflix and Amazon Prime have cut their teeth. Users want to be able to experience a whole series in a matter of days or even hours, and as attention spans dwindle, so do the returning viewers on typical week-by-week scripted programming. I think the next big trend we will see is studios closing the gap between seasons, so we may even see one or two seasons of a show in the same year, in order to offset the inevitable audience number drop.

We have already seen some of the traditional broadcasters sell programming to streaming giants, either after the initial air date or in other non-native territories, which has been a step in the right direction. However, in order to future-proof themselves, traditional pay TV providers must cater to a new generation who want to watch content whenever and wherever they are, without the arduous wait for the next episode.

This generation also want the ability to pick and choose subscriptions, with one individual possibly having accounts with multiple services. In my experience of working with streaming services over recent years, this is something that was recognised by early contenders such as Roku who created a set-top box built for streaming that was smaller, more portable and more user-friendly than your typical offering, and offered compatibility across a range of services. Offerings such as TVPlayer have also started to bridge the gap between streaming and traditional British television by bringing live TV to younger, more mobile generations through their app; this is something traditional pay TV institutions should take note of.

John Phillips, Managing Director, Zuora:

It’s no secret that the media industry has changed. A few years back, it was in crisis. The shift towards digital meant advertising spend was predominately diverted to the tech powerhouses such as Google and Yahoo!, resulting in a widespread fear that consumers would never again pay for online content.

A few years later, we started to see a few media houses take control and implement basic paywalls in order to access premium content. This slight adjustment jumpstarted revenue, and for the first time since the crisis, brought growth in through their respective subscriber basis.

Since then, the wider media industry has caught on and subscription services have evolved tenfold. Today’s subscription services have morphed into flexible and adjustable models, where media brands have the power to create unique, effective and profitable plans.

From the standard rate plans for weekly, monthly or quarterly subscriptions, to flexible charge models - per article or per download - the ability to adjust has allowed media leaders to test and try what clicks with their subscribers. As a result, they’ve created a successful and reliable revenue model independent from advertising.

David Ciccarelli, CEO and Co-Founder, Voices.com:

Before I got married, we cut the cord to the TV. This was likely predicated by growing up in a household where there was a one hour limit on the amount of television we could watch. When considering starting a family of our own, my wife and I agreed that books and the Internet would be the primary source of news and knowledge entering the home. Since then, we’ve never been a cable subscriber, and I think I know why.

What Netflix does well is facilitating the act of discovery. First, by allowing viewers to create their own profiles, the platform recalls the shows that you watched, but also those in progress that you likely want to finish. By analysing the viewing habits of the individual, Netflix can make recommendations seemingly tailored to your unique preferences.

While recommendations are a good means of discovering new content, it’s equally enjoyable to navigate the categories of both movies and TV series’ in hopes of finding something new. Surely, TV networks could better organize their content using a similar structure. Let’s move beyond the timeline and give the viewer alternative paths for discovering what’s on right now, and in the future.

It’s well understood that TV is advertiser-supported. However, perhaps it’s time to innovate beyond standard ad formats, the ubiquitous 15 and 30-second spot. Shorter spots may be one option, or subtle overlays may welcome new advertisers looking to reach audiences in fresh new ways. While I certainly don’t claim to have the answer on this one, I’d like to encourage broadcasters to consider this space ripe for innovation.

Both Netflix and the movie theatre experience are very immersive. In our household -- and I’ve heard of others doing the same -- sitting down for a show on Netflix, even one as short as a single episode, involves getting snacks, drinks, and blankets on a cold day. When visiting others, I have yet to see or hear of a similar ritual when flipping through the channels on TV for an indefinite period of time. Live sports may be the rare exception. Nonetheless, programming could be designed in such a way for the viewer to suspend their disbelief. Constant interruptions ruin the flow of the experience. Networks should consider new ways to keep the viewer watching and engaged.

Chris Wood, CTO, Spicy Mango:

British TV will have to change the way it operates if it wants to compete with internet giants such as Amazon and Netflix. OTT providers are under still under no obligation to adhere to the usual broadcast guidelines, giving consumers access to content whenever they want it. On the other hand, the linear world is still heavily regulated, particularly around watershed, and this essentially positions OTT at an advantage and has allowed those businesses to innovate faster.

Increased regulation, processes and rules are proven factors of reducing innovation, which the Broadcast sector has seen a lot of in current years. When boundaries are allowed to be pushed, technology has space to innovate and becomes more attractive to different businesses. The fact is, that internet giants free from regulation have completely captured the market and audience today and consequently the traditional broadcasters have been left behind. But how could we introduce regulations that apply to all and how would it work? How would a watershed rule be enforced in catch-up OTT? Would it require credit card verification to prove age? Is PIN enforcement enough? Or should it be enforced at all? Rather than locking everyone in, why don’t we open the doors?

Providers like the BBC need to be freed from constraints like this in order to innovate. With less and less Millennials tuning into live TV and more opting for paid for streaming services like Netflix on a device of their choosing, there is little value for this demographic in their TV license fee if they are only going to watch odd World Cup match or the news. OTT products and services have grown rapidly – primarily because of the flexible nature of viewing that is offered. For British TV to grow its user base and capitalise on these benefits – it’s time to remove the shackles.

The result would give viewers more platform choices and enable content developers to create more relevant programmes for their audiences.

Chris Lawrence, Head of UK Communications, Media and Technology Consulting, Cognizant:

In many ways, we are living a golden age for television. Technology giants, like Netflix, have raised the bar, spending more than ever before on high quality shows. It has become clear that to keep up, broadcasters need to make sure that they are investing more money on producing shows and films that draw in audiences. But in order to spend additional budget on production, cost savings need to be made elsewhere.

That is why broadcasters are using technology to streamline back-end operating costs. Automating back-end operations is a crucial step towards greater agility, enabling broadcasters to maximise revenue from content. A good example of this is UKTV’s investment in a new broadcast management system to provide greater flexibility to schedule and manage content across its channel brands and support Video on Demand viewing.

Broadcasters also have a chance of winning back customer loyalty through providing a slick customer experience and reducing any friction along the customer journey. Reacting to this challenge, last year the BBC announced it would be using artificial intelligence (AI) to “better understand what audiences want from the BBC". The initiative, launched in partnership with eight UK universities, will take the learnings and directly apply them to the BBC’s UK operations. The use of AI to boost the customer experience and streamline services will crucially enable broadcasters to invest more heavily in the front of screen services. Because ultimately, content is king.

James Gray, Director, Graystone Strategy:

As technology has changed so have subscription models and hence we now have a shift towards Amazon Prime and Netflix from pay TV. There was a time when TV content was consumed by a family with one subscription per household and only one device - a TV - in the house to watch it on.

Now individuals consumers have multiple content subscriptions and many different devices so they can access programmes on the bus, in the park, at the station, by the pool on holiday, and in a different room to another family member. Smart phones and tablets have enabled this, as well as the availability of wifi and more recently better rates for data and data roaming.

 But there are some real polar differences as to which customers take which TV service. Graystone segmentation analysis shows that older customers “Settled Seniors” have the lowest take up of Pay TV, with 53% having Pay TV like Sky or Virgin and only 17% taking internet TV models like Netflix or Amazon. Unsurprisingly the Technology Trailblazer segment, which is much younger, has the highest adoption rates - 65% and 56% showing that they are taking multiple subscriptions. It’s a clear indicator of where the market is going and where providers need to place their bets.

The younger segments are also far more transactional, so for example if a show moves from Prime to Netflix they will move too. Amazon’s move into football will no doubt cause some ripples in the market. It illustrates that as well as offering convenience, the content has to be right too. You must know what your customers like and provide more of it - Netlfix is very good at producing original drama for this reason.

What fascinates me is where the subscription economy is going. I can pay for shaving products, gin, dog food even socks on a monthly subscription. We can’t be far away from a time when all subscriptions can be managed under one mega bundle - TV, mobile, broadband, gas, electric, gin, socks, car access, and who knows what else.

As millennials care less about ownership and more about experience and access, we will see more and more subscription models managed via smart phone apps. And for companies that has to be a great thing, particularly if consumers manage their subscriptions like my gym subscription - 36 monthly payments to date and just 5 visits! (But next month I am definitely going more regularly!)

Alistair Thom, Managing Director, Freesat:

With a raft of new entrants in the market and increasing choice for consumers driving change in viewing habits, there’s no argument that TV services in the UK and elsewhere are facing tough challenges.  Whether that’s competing for content rights against global companies with huge budgets or facing up to new distribution opportunities offered by online services.

Yet from a Freesat perspective, we believe that Ofcom’s report suggests that new entrants offer a great opportunity for subscription free platforms like ourselves. While On Demand services offer new choice and flexibility for customers, they do not offer all of the content customers want, nor can they offer the same level of shared experience as the “appointment to view” TV moments found on traditional broadcast TV; whether that’s amazing sporting events like the World Cup, global spectacles like the Royal Wedding or this summer’s “OMG TV” in Love Island.

Our research^[1] has shown, that the most watched programmes are consistently those available on free channels, even in homes signed up to a pay TV subscription. These pay platforms must now face up to the additional challenge to their business models offered by new entrants with lower monthly fees and no long-term contracts.

I strongly believe that the UK has the best free-to-air TV in the world and while methods of entertainment consumption are clearly evolving, especially amongst younger viewers, there will still be a place for more traditional viewing in the changing media landscape for many years to come.

[1] Freesat carried out omnibus research with OnePoll in May 2017, surveying 2,000 TV subscribers on their TV habits.

One of the most popular American sitcoms, Friends, is enjoying a revival thanks to being made available on Netflix in January. Now a new generation of fans is laughing at the exploits of Joey, Chandler, Ross, Rachel, Monica and Phoebe as they live in downtown New York, grow into adulthood and drink a lot of coffee.

Over the course of the show, each character has their highs and lows when it comes to their careers. Monica is a great chef, though is reduced to working at a ‘50s diner. Joey falls on tough times after being killed off from Days of Our Lives, and Chandler quits his job at (wait, where does he work, again?) and joins the competitive world of unpaid internships.

This got us thinking, which of the characters did best by the time the show ends? Who had the most impressive career and who is still struggling to get by? We combed through all 236 episodes of the show and teamed up with James Calder from Distinct Recruitment to estimate the wages for each character and see who came out on top:

Looks like Joey, despite his unstable career through many of the earlier seasons, was the highest earner. After being hired back to Days of Our Lives and sharing a film with legendary actor Richard Crosby (Gary Oldman), Joey is riding high when the show comes to an end. He had quite the journey getting there, too, as he racked up 17 different jobs in total. No doubt he had more than a couple of loans from Chandler while slumming it as a cologne sampler, Christmas tree salesman and even, briefly, a gladiator model at Caesar’s Palace in Las Vegas.

While Joey earns the most, we can’t overlook Rachel’s transformation through the show –  starting as a coffee house waitress and ending up as a merchandising manager at Ralph Lauren. Chandler had the biggest fall from grace, leaving his job in data analysis and data configuration to become a junior advertising copywriter.

We’re all guilty of it – we’re trying to stay frugal and save every penny, but something comes along that tempts us a little too much. During our research, we found more than a few examples of the Friends gang splashing out and buying something outrageous. Who can forget Rachel’s cat, Mrs. Whiskerson, the boat Joey accidentally buys at a charity auction, or the leather pants that left Ross in a tight spot during a date? Being the lowest earner of the group, Phoebe was also the most sensible with her money, only spending $240 in her attempts to get Rachel to move back in with her.

(Source: giffgaff)

Time to say goodbye to the gadgets and services that met their demise this year, including Windows Phone, the Kinect, 3D TVs, Apple's Shuffle and Nano, and AIM.

Creditsafe Group, the global business intelligence expert, has found that despite a significant investment from Lord Alan Sugar, past winners of the show still have a relatively low net worth and poor credit rating.

Over the last five years the winners net worth, credit score and credit limit have decreased on average by 73%, with credit scores falling from 87 to 64 and credit limits reduced from £46,000 to £2,000, according to Creditsafe data.

Analysing the figures on its database, Creditsafe discovered that none of the winning candidates in the last five years have doubled the £250,000 investment made by Lord Sugar, with the most recent winner Alana Spencer’s net economic position valued at just £7,538 with a £2,000 credit limit. In comparison, the 2012 winner, Richard Martin has a £325,789 net worth and a £46,000 credit limit.

In addition, businesses of past Apprentice winners appear to have prospered once the candidate had stepped aside. Alresford founded by Tom Pellereau (2011 winner), Aston Rowant in which Lee Mcqueen (2008 winner) was a director and London Contemporary Orchestra Limited where Simon Ambrose (2007 winner) was a director, saw a significant uplift in credit score and credit limit when the Apprentice winners stepped away. For example, Tom Pellereau resigned on 15/12/2011 from Alresford when the credit score was 43 and the credit limit was £500, the business now has a credit score of 80 and a credit limit of £1,000.

David Walters, Head of Content & Technology at Creditsafe UK & Ireland, said: “There is a misconception that once a candidate wins the Apprentice, they will have immediate success in business. We can see from the data that this isn’t always the case. While the past five winners are all profitable, there is no evidence to suggest the partnership with Lord Sugar provides any further financial security past the initial investment. It will be interesting to see who wins on Sunday night and how they perform in comparison to the previous winners over the next few years.”

The Apprentice is currently being aired on BBC and is in its thirteenth series. This week Lord Sugar, in a surprising turn of events, chose both finalists, Sarah Lynn and James White, as winners. A first in the TV show’s history.

*Average across all active businesses.

(Source: CreditSafe)

What if The Apprentice (UK) was actually a credit based show rather than a strategy play? Below, Cato Syverson, CEO of Creditsafe, discusses for Finance Monthly the ‘real winner of the show’, if the win depended solely on the contestants’ past dues, credit history and debt.

This year’s series of the popular television show, The Apprentice is now in full swing. The reality TV show - now in its thirteenth series – sees 18 hopeful businessmen and women compete to become Lord Alan Sugar’s latest business partner, with the eventual winner scooping a £250,000 investment into their proposed business venture. But how does Lord Sugar whittle the 18 potential candidates down to one? What is he looking for in a business partner? By the looks of the latest series, it’s not their business or credit history.

Using Creditsafe data, we have analysed who the real winner of the Apprentice 2017 should be and who the riskiest investment would be for Lord Sugar, based purely on the contestants’ financial and business history, past success and acumen. We devised a simple scoring model to rank the candidates, considering factors such as the profitability of current businesses they own, credit ratings and whether they’ve received any County Court Judgments (CCJs).

The results indicate that interestingly, week three casualty Elliot Van Emden was the safest bet for Lord Sugar and should have been the real winner of this year’s series. With a credit rating of 95, a net worth of £27,006 and no CCJs to his name, Elliot was a strong contender and the least risky candidate in this year’s competition.

Most surprisingly, Elizabeth McKenna, one of this year’s most talked about and controversial candidates, is now the least risky candidate for Lord Sugar to enter into business with. Elizabeth has a net worth of £36,940, no CCJs and five current business appointments making her a solid choice, even though the florist has irritated a number of candidates on the show. Luckily, this week, she managed to dodge being firing by Lord Sugar when she was brought back into the boardroom as sub-team leader. At the other end of the spectrum, Bushra Shaikh has two dissolved companies under her belt, a very low credit score of 49 and one CCJ to her name, making her the least advisable selection for Lord Sugar.

While there isn’t a strict set of rules about choosing a business partner, there are warning signs to be aware of when faced with this decision: For example, if a director has any previous failures buried in their business history. Our data shows that if a director has been involved in a company that has failed in the last three years, they are nine times more likely to fail again compared to a director who has never been involved with a business collapse.

In addition, it is wise to check whether candidates have links to any businesses with low credit scores. Many businesses are owned by or have links with other companies, and how they’re performing financially can have a knock-on effect. This means it’s sensible to look at all linked companies credit reports to check you won’t be impacted by a low credit score or poor payment history of another business in the future.

We have a few more weeks to wait and see who Lord Sugar chooses as his next business partner, but it will be interesting to see if he takes a risk or makes a safe bet. Who you enter business with can have a significant impact on both your financial performance and reputation, and therefore doing your homework on potential candidates is critical for success.