The ongoing battle to determine employed from self-employed individuals for tax purposes rumbles on. The latest case, involving a group of 60 professional football referees has just been decided.
The First Tier Tax Tribunal has found against HMRC who contended that the referees were employees of Professional Game Match Officials Ltd (PGMOL). HMRC were looking to collect backdated national insurance contributions and PAYE tax for the referees over three football seasons, between 2013 and 2016, totalling approx. £580,000.
The PGMOL employs referees under full time written employment contracts for some events, but in this case the referees were working in their spare time, alongside full time employment contracts.
PGMOL demonstrated successfully that two of the core tests of employment were not met by these arrangements and so that the referees were self-employed. The main test in question was mutuality of obligation. Mutuality of obligation says that one person is obliged to make a payment and in return the other is obliged to perform services. If there is no mutuality of obligation, there can be no contract and so no employment.
This is the most recent is a series of cases where HMRC have failed to consider mutuality of obligation, even though this is one of the key elements to determine employment status. HMRC have now lost three out of four cases at tribunal on this area, highlighting the complexity of the rules and the need for clarification……after all if HMRC can’t determine who is employed or self-employed what chance does the taxpayer have !
For more information please contact Lesley Sutton on 01484 550037 or email firstname.lastname@example.org