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Thompson is the latest in a long line of TV presenters and celebrities who have been targeted by HMRC - with mixed outcomes.
This ruling was reached at a First-Tier Tax Tribunal by tribunal judge Richard Chapman QC and follows an earlier ruling from 2019 which also went in HMRC's favour.
After his playing career finished, Thompson became a regular on Sky Sport's Soccer Saturday in the 1990 and again from 2004-2020. From 2013, he contracted with Sky through his limited company, PJ & MD Ltd. He was investigated by HMRC over a total liability of £294,306.68 accrued over contracts held between 2013/14 and 2017/18.
The case revolved around the examination of a hypothetical contract to assess Thompson’s employment status. The Tribunal looked at various factors to determine whether Thompson should have been considered an employee of Sky or a self-employed contractor. The Tribunal concluded that, considering the overall picture and several key aspects, the factors pointed towards a contract of employment.
Control
The Tribunal identified a level of 'control' between Thompson and Sky, in part because of the existance of a comprehensive non-compete clause which required Thompson to obtain written permission from Sky if he wished to provide similar services to other businesses.
This enabled Sky to maintain a degree of esclusivity of Tompson's services as well as demonstrating a 'sufficient framework of control'.
Mutuality of Obligation existed
Although there was a right to provide a substitute, it was implied that the services would be carried out personally by Thompson. It was accepted that Sky had the the right to determine a substitute's suitablity and Thompson conceded that he wouldn't tell Sky who the substitute should be.
Examining the hypothetical contract and the actual contract, the Tribunal found inconsistencies and came to the conclusion that Mutuality of Obligation existed between Thompson and Sky as Thompson was obligated to provide services in accordance with the terms of the contract, while Sky was obligated to pay the agreed fee.
Earnings
The fees paid were fixed in advance, not dependent upon air time, andcomprised a substantial majority of the company's income.
Thompson has until Monday 5 February, to decide if he wishes to appeal.
Further IR35 information
For more information about all aspects of IR35, including other high profile IR35 cases see Shout99's News on IR35 section.
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Susie Hughes © Shout99 2024
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