![UT (Tax & Chancery) UT-2024-000044 - [2025] UKUT 00094 (TCC)](https://backend.juristeca.com/files/emisores/logo_ICfrj4g.png){kind=logo}
UT (Tax & Chancery) UT-2024-000044 - [2025] UKUT 00094 (TCC)
Fecha: 23-Ene-2025
INTRODUCTION
INTRODUCTION
PD & MJ Ltd (“the Appellant”) appeals against the decision (“the Decision”) of the First-tier Tribunal (“FTT”) dated 11 December 2023 dismissing its appeal. The FTT confirmed HMRC’s decisions to assess the Appellant for PAYE and NIC in the sum of £294,306.68 for tax years 2013-14 to 2017-18 in reliance upon ss 48-61 of Chapter 8 of Part 2 Income Tax (Earnings and Pensions) Act 2003 (“ITEPA 2003”) (the “Intermediaries Legislation” (commonly referred to as IR35)) and Regulation 6 of the Social Security Contributions (Intermediaries) Regulations 2000 (SI 2000/727) (“the Intermediaries Regulations 2000”).
The FTT concluded that the Intermediaries Legislation applied to arrangements for the Appellant to supply the services of Phil Thompson (“Mr Thompson”) to Sky UK Limited (“Sky”). Mr Thompson was a football pundit on Sky, in particular on its weekly television programme variously known as Soccer Saturday, Gillette Soccer Saturday, and Gillette Labs Soccer Saturday (referred to by the FTT and in this decision as “Soccer Saturday”).
The Intermediaries Legislation required the construction and consideration of hypothetical contracts between Sky and Mr Thompson, reflecting the periods of the actual contracts between Sky and the Appellant. The sole issue before the FTT was whether, under the hypothetical contracts, Mr Thompson would be regarded for income tax and national insurance purposes as an employee of Sky: see s. 49(1)(c)(i) ITEPA 2003 and Regulation 6 of the (Intermediaries) Regulations 2000 (Footnote: 1).
The issue in this appeal is whether the FTT erred in law in concluding that that condition was satisfied: i.e. that Mr Thompson would be regarded as an employee of Sky under the hypothetical contracts.
The Appellant relies on four grounds of appeal to submit that the FTT made the following four overarching errors of law:
The FTT’s interpretation of the actual contract between the Appellant and Sky was
wrong in law.
The FTT’s identification of the terms of the hypothetical contract was wrong in law.
The FTT’s decision as to whether the necessary framework of control existed was
wrong in law.
The FTT’s application of the third stage of the employment test was wrong in law.
In summary, HMRC’s position is that the FTT properly understood and applied the now-significant body of case law regarding the application of the Intermediaries Legislation and reached an evaluative judgment that was open to it on the evidence before it and with which it would be wrong for the Upper Tribunal to interfere.
At the hearing of the appeal Mr Michael Firth KC appeared for the Appellant and Mr Christopher Stone KC leading Ms Georgina Hirsch of counsel appeared for HMRC, the Respondents. We are grateful to them for the quality of their written and oral submissions.
- Heading
- INTRODUCTION
- THE LAW
- THE FTT DECISION AND THE EVIDENCE
- The background leading up to Mr Thompson’s work for Sky before 2013
- The contracts with the Appellant company and their operation from 2013
- THE GROUNDS OF APPEAL
- A(1) Erroneous approach to and interpretation of “on an ad hoc as and when required basis”
- The FTT Decision
- The Appellant’s submissions
- Discussion and Analysis
- A(2) Erroneous approach to interpreting “all directions and requests…will be complied with”
- The FTT Decision
- The Appellant’s submissions
- Discussion and Analysis
- A(3) Erroneous construction of the provision relating to travel and destination
- The FTT’s Decision
- The Appellant’s submissions
- Discussion and Analysis
- B(1) Wrong approach to establishing hypothetical contract
- The FTT’s Decision
- The Appellant’s submissions
- Discussion and analysis
- (B2) Failure to take into account relevant evidence
- Discussion and Analysis
- (B3) Approach to the “informal arrangements” evidence
- Discussion and analysis
- (B4) Reasonableness not a permissible shortcut
- Discussion and analysis
- The FTT’s decision as to whether the necessary framework of control existed was wrong in law The FTT Decision
- The Appellant’s submissions
- Discussion and analysis
- The FTT’s application of the third stage of the employment test was wrong in law
- 68(1) “The control set out above was considerable. In particular Sky’s…right to require Mr Thompson’s performance of the services at location of their choosing is consistent with an employment relatio
- Discussion and analysis
- 68(2) “Mr Thompson’s role as a pundit and a guest giving his own opinion does not tend against the hypothetical contract being an employment contract.”
- Discussion and Analysis
- 68(3) “The manner in which Mr Thompson prepared for and provided these services is not inconsistent with an employment relationship. The same is true of the fact that Mr Thompson would leave as soon a
- Discussion and Analysis
- 68(4) “The fact that Mr Thompson’s opinions and analysis remained his does not affect the employment relationship. Crucially, the hypothetical contract restricted Mr Thompson’s ability to exploit thos
- Discussion and Analysis
- 68(5) “The hypothetical contract provided for termination by Sky but not by Mr Thompson.”
- Discussion and analysis
- 68(6) “Whilst Mr Thompson had his own status and character as a result of his expertise and professional background, he had become associated with Soccer Saturday. This was recognised in the wording o
- Discussion and Analysis
- 68(7) “The fact that the payment was paid as a block fee regardless of air time is neutral. Whether this is a salary or a fee depends upon whether the arrangement was an employment contract or not rat
- Discussion and Analysis
- 68(8) “It is right that Mr Thompson’s work for Sky took up a relatively small amount of his time and that this was one method of capitalising on Mr Thompson’s own status and character. However, this m
- Discussion and Analysis
- 68(9) “The fact that Mr Thompson had the potential to increase his income through the efficient use of his time is neutral. This is saying no more than the fact that Mr Thompson could earn money from
- Discussion and Analysis
- Overall assessment lacking in logic and outside the reasonable range
- Discussion and analysis
- Conclusions