A First Tier Tribunal deemed the contracts held between Mr Clark’s limited company, Little Piece of Paradise, and Sky, from 2013 to 2018, each to have resembled an inside IR35 contract.
As a result, Mr Clark, who was well known for presenting Sky Sports’ darts coverage, is expected to repay HMRC missing income tax and national insurance contributions for the period in question.
The decision rested on the three key IR35 status tests - Mutuality of Obligation (MOO); Control; and Personal Service and Substitution.
Mutuality of Obligation (MOO): There was a fixed annual change of £150,000 from Mr Clark to Sky, which was divided into monthly payments. Mr Clark's fees did not vary if he worked more or less time - all indicating he was paid in the way an employee was.
Control: Although Mr Clark controlled his scripts and the manner of presentation, it was deemed that Sky controlled which events to cover and therefore where and when Mr Clark worked. He also followed the direction of the production team. Sky also had 'first call' on Mr Clark's services
Personal service and Substitution: Although Mr Clark was able to provide a substitute on a number of occasions, it was found that the arrangement, ie contract and payment, was directly with Sky not with Mr Clark.
Top of the agenda
Seb Maley from IR35 tax specialists Qdos said: “The steady stream of IR35 tribunals recently shows that IR35 is top of the agenda for HMRC, who now has the remit to pursue not only contractors but also businesses for staggering tax bills. Dave Clark is another victim of the complex IR35 legislation.
“A high profile victory for HMRC may concern contractors and businesses, but the fact of the matter is that Clark’s working relationship with Sky - like many other presenters - was quite different to ones held by typical contractors. It’s also possible that Clark may appeal the case again and overturn this decision.
“This result shouldn’t dissuade businesses from engaging contractors, the vast majority of whom - in our experience - are truly self-employed. For example, 87 per cent of more than 30,000 contractors we have rigorously assessed on behalf of businesses belong, in our expert opinion, outside IR35.
“Ultimately, the judge’s view was that Clark was subject to control by Sky, who also paid him whether he worked or not. What’s more, he was restricted from presenting for other companies, which the judge believed painted a picture of employment rather than self-employment. But to reiterate, this certainly isn’t the case across the board.”
Further IR35 information
For more information about all aspects of IR35, including the controversial IR35 reforms see Shout99's News on IR35 section.
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Susie Hughes © Shout99 2021