HMRC Loses Another Employment Status Case

HMRC appeals a lot of employment status cases by default, but one that came to light recently where HMRC lost its appeal against a number of football referees which it believed owed £584,000 in a case which has a direct bearing on IR35 ...

The decision was published recently, and the Upper Tribunal dismissed the appeal against a previous decision, where it ruled tax was not payable by the football referees that had been engaged by a company called Professional Game Match Officials Limited (PGMOL).

"A tribunal had found that these referees were not actually employed by PGMOL!"

It said they were responsible for their own Income Tax and National Insurance as self-employed individuals. They were not subject to the IR35 rules, and the huge sums mentioned above was not due.

The case first came to light when PGMOL disputed a tax bill they'd received from HMRC claiming it owed £583,874 in unpaid taxes for 2014/15 and 2015/16 as an employer for the football referees. HMRC had argued the referees were to be considered employees of PGMOL and the company was liable to pay a higher level of NI contributions.

As the football referees officiated in League 1, League 2, in the Championship and the FA Cup (and only occasionally as the 4th official in the Premier League), there couldn't be treated as employees as they had other day jobs and could turn down requests to officiate at games due to other commitments taking precedence.

The Upper Tribunal held that PGMOL did not have complete control of the referees who could withdraw from a match at any point. In addition, each of the supplied their own equipment and had complete responsibility for their own fitness and pre-match preparations.

"They couldn't be classed as employees because there was no Mutuality Of Obligation!"

This really is a key tax case for self-employed workers querying their employment status and is relevant for those currently under attack from HMRC. Thankfully, the Upper Tribunal finally sees through the unfairness of HMRC's aggressive approach to these commercial relationships.

If you'd like to find out more about anything I've written here, do call me on 01908 774323 or leave a comment below and let's see how I can help you.