Upper Tribunal Tax and Chancery Chamber

UT/2023/000068 - [2024] UKUT 00262 (TCC)

Fecha: 25-Abr-2024

Factors (4), (5) and (9)

Factors (4), (5) and (9)

74.

At FTT[134(4), (5) and (9)], the FTT stated as follows:

(4)

The provisions for intellectual property rights under clause 10 would place no embargo on Mr Barnes’ right to reproduce his opinions elsewhere that had been given during a live broadcast for Sky. The work pattern for the match on Saturday 10 November 2018…illustrates the intensity of preparation in the run-up to cover for a live match, and immediately after the match, Mr Barnes would be putting pen to paper to produce his Sunday Times column. In his journalistic output, Mr Barnes would most likely be reproducing aspects of his commentary given in the Sky broadcast on the same match. The phrasing and the emphasis might differ for the column, but it would be the same match from which Mr Barnes had gleaned insights as a live commentator while broadcasting for Sky, and he was not debarred by Sky in reusing any material so gleaned in other domains or avenues. One such avenue would be when Mr Barnes participated as an expert representative to select the ‘Player of the Season’ for the European Cup. The material that Mr Barnes had used to provide his services for Sky remained his intellectual property, essentially because he is the master and the creator of his opinions as a pundit.

(5)

Sky would not consider it to be a conflict of interest when Mr Barnes reproduced in newspapers material which had been gleaned in the course of providing his services to Sky. On the contrary, Sky would be attuned to the publicity benefits conferred on its broadcast when Mr Barnes’ column on the match broadcast by Sky would cover the back page of the Sunday Times the next day. Mr Barnes’ Times/Sunday Times columns would take some of Sky’s games to the newspaper readers, and Sky in turn benefitted from the reputation of Mr Barnes as a renowned columnist on its roster of commentators.

(9)

To maintain his profile as a pundit, Mr Barnes’ experience as a professional ex-player has stood him in good stead. It is in part his experience as a former player that he can profit from dedicating hours and days to watching replays of matches dimming out the sound, in order to find that unique angle for his commentary, to gain fresh insights so that his opinions do not become stale. There was no demarcation in the research, the thinking, the scripting he did for Sky broadcast and the newspaper columns, or indeed in any other ancillary engagements he undertook, (such as being an expert witness to the court on Farrell; or as representative to select the ‘Player of the Season’ for the European Cup). It was the one and the same enterprise of being ‘Stuart Barnes, the voice of rugby’.

75.

The FTT considered it relevant that Mr Barnes was free, and even encouraged by Sky, to exploit his work product for other businesses. The FTT also considered it relevant that there was no demarcation between the preparation and work which Mr Barnes did for Sky and that which he did for other businesses; it was all part of the same enterprise.

76.

The terms in which the FTT expressed these factors, particularly Factor (9), suggest that the FTT may have fallen into the sort of error found by the Court of Appeal in Atholl House to have been committed by the Upper Tribunal in Atholl House UT, namely of approaching the Third RMC Stage by carrying out a comparison of the business carried on by the taxpayer outside the relevant hypothetical contract and that carried on under that contract. However, any such error would be a different error from that asserted by HMRC under this element of Ground 2, because HMRC’s argument under Ground 2 is that the twelve factors identified were irrelevant, since as matter of principle they were not indicators pointing away from an employment relationship under the hypothetical contract.

77.

We consider that Factors (4), (5) and (9) were, as a matter of principle, capable of being indicators that the relationship under the hypothetical contract was not one of employment. In principle, an ability on the part of the individual to create and immediately exploit intellectual property generated in providing the services under a hypothetical contract in business activities outside the hypothetical contract points towards a contract for services rather than a contract for service.