Football Pundit 0 HMRC 2: Phil Thompson loses latest IR35 appeal

Andrew Timpson, employment tax partner at 91̽»¨, comments on HMRC’s latest IR35 case involving Phil Thompson: “Former Liverpool legend and football pundit, Phil Thompson is the latest in the long list of media personalities to have his employment status challenged in the courts by HMRC.

“Mr Thompson has now lost in court for a second time against HMRC and its argument that the agreement between his personal services company and Sky TV was an employment contract that fell under the Intermediaries (IR35) rules. As a result, he is facing a tax bill in the region of £300,000.

“For many years, Mr Thompson was directly engaged by Sky TV to be a pundit on ‘Soccer Saturday’. This changed in 2013 when a new contract was agreed between his personal services company and Sky TV for the provision of his services. HMRC determined that the new contract was an employment contract, and that tax and National Insurance was due on the fees for his punditry paid by Sky TV. 

“Unlike many of the other media related cases which have revolved around TV presenters, Mr Thompson was a pundit, sharing his opinions and experience on football matters. His opinions were his alone and, although subject to broadcasting guidelines, were generally unfettered.

“In the first round against HMRC, the First-Tier Tribunal (FTT) had concluded that the contract, taken together with the actual arrangements in place (the ‘hypothetical contract’), amounted to a contract of employment. In particular, the court decided that giving his opinion and analysis did not affect the employment relationship, and that the hypothetical contract restricted his ability to exploit those opinions.

“In this latest appeal, the Upper Tribunal concluded overall that the FTT had not erred in law and was entitled to come to its conclusions.

“It is clear from this case and other recent cases, that it is the actual arrangements around an engagement that need to be considered. The contract itself is merely the starting point to determine if there is an employment relationship.”