Tribunal appeal proves costly for ex-Sky Sports Pundit

Employment & Payroll services provide peace of mind to businesses nationwide when it comes to employment status of their respective workforces and the potential pitfalls around IR35 compliance.

It was interesting therefore to read recently that former footballer and Sky Sports pundit Phil Thompson lost his appeal at the Upper Tribunal over his IR35 tax case.

Initially the case was heard in 2023 at the First Tier Tribunal (FTT) before Thompson through his personal services company (PSC) PD & MJ Limited, appealed the decision. Thompson disputed HMRC’s claim that he owed both Tax and National Insurance contributions on his earnings from the time he worked at Sky Sports between 2014 to 2018. The dispute centred around the nature of the contract with the broadcaster and whether such could infact be classed as ‘disguised’ employment.

Sky Control

The Tribunal found that Sky had control of Thompson’s output, determining the location for filming and had significant control over his work for the broadcaster, whilst working as a Soccer Saturday pundit on Sky.

HMRC issued a demand for £294,306 covering the four-year period, and the FTT ruled in the tax authority’s favour.

Essentially, the FTT found that there was employment because there was a considerable amount of control by Sky and Mr Thompson was associated with the Soccer Saturday programme.

Barrister Michael Firth KC representing Thompson claimed that of the ‘factors the FTT purported to consider, very few are actually said to support employment and one is left with the appearance that the FTT reasoned that if there is control and nothing inconsistent with employment, that is employment, which is not the right test’.

Appeal Rejected

BUT the Upper Tribunal was not persuaded, stating ‘We reject this ground of appeal challenging the evaluative exercise conducted by the FTT, which we have accepted contained no material errors of law and was well within a reasonable range of conclusions that could have been reached.’

As in the FTT ruling, the Upper Tribunal stated that what happened in practice did not ‘detract from those contractual rights and there is no suggestion that there was any agreement that those contractual rights did not apply or were varied’.

Relatively speaking Thompson’s work for Sky took up a small (Ish) amount of his time but the Sky contract provided 80% of his earnings.

The Decision

Judge Rupert Jones stated: ‘This appeal must be dismissed because the grounds of appeal do not disclose a material error of law by the FTT in making its decision.

‘When the decision is read as a whole, there was no material error of law in the FTT’s conclusion that the intermediaries legislation applied to Sky’s engagements of Mr Thompson through the appellant because he would have been regarded as an employee under direct hypothetical contracts with Sky.’

As a result, the appeal was dismissed leaving little wiggle room.

For any help and / or advice regarding employment status or payroll services contact the team at Employment & Payroll Services on 0844 057 0275 or accounts@epservicesukltd.co.uk

[image: Tingey Injury Law Firm, unsplash.com]