UT (Tax & Chancery) UT-2024-000044 - [2025] UKUT 00094 (TCC)

We accept that the FTT did not state whether this was a factor consistent with employment or whether it was simply neutral – although it is to be inferred that it was saying that it supported a conclusion that the contract was one of employment because the FTT stated that it was giving reasons for this conclusion at the outset of [68].

In any event, the FTT did not err in law in finding that the termination provision in the hypothetical contract (which would have given Mr Thompson no power to terminate and which gave Sky power to terminate only for cause (as defined)) was a factor consistent with employment because it required a strong mutual obligation for Mr Thompson to work for Sky during the course of the contract which Mr Thompson had no right to get out of. The FTT was entitled to find that Mr Thompson agreeing to “throw in his lot” with Sky during the contract period without being able to “walk away” easily was a significant commitment to Sky and inconsistent with a self-employment relationship.

The Upper Tribunal explained in Barnes UT, at [117(1)], when considering the identical termination provisions, that the length of a fixed term contract is also a relevant factor. A two-year fixed term contract terminable only in restricted circumstances provided Mr Thompson with significant economic security and imposed significant mutual obligations on both parties, effectively tying them together for each two-year period.