In HMRC v Kickabout Productions [2020] UKUT 0216, the Upper Tribunal (UT) allowed HMRC’s IR35 appeal finding that a radio presenter was an employee. TalkSPORT was obliged to provide work and this outweighed all other factors of employment status.
- Kickabout Productions Limited (KPL) provided the services of Paul Hawksbee as a radio broadcaster to TalkSPORT where he co-presented a daily show.
- HMRC raised assessments for a three-year period of £143k in Pay-As-You-Earn (PAYE) and National Insurance Contributions (NICs) on the basis that the company was within the IR35 Off-Payroll Working rules.
The First Tier Tribunal (FTT) narrowly decided that for the purposes of the hypothetical employment contract requirement of IR35, Mr Hawksbee would not have been an employee of TalkSPORT. In the context of two separate contracts they considered mutuality of obligation and control and concluded that there was:
- No obligation on Talksport to provide work.
- Services controlled by Talksport were largely restricted to delivering the show.
- There were no rights for the presenter to holiday, sick pay, pensions or paternity leave or provision regarding medicals, training.
- A payment obligation was restricted to a fee for each show delivered, with no retainer or bonus.
- The presenter was an individual who was not part and parcel of the TalkSPORT organisation.
HMRC was given leave to appeal to the UT on the basis that the FTT had erred in law when they decided that the contracts contained no obligation for TalkSPORT to provide work. As this was highly material to their overall decision the UT could exercise its power to set aside the decision and remake it.
On appeal the UT concluded that the contracts were materially similar and:
- The express engagement of KPL for a fixed-year period to provide services such as presenting the three-hour daily show, preparation and rehearsals, was enough to constitute a binding commitment by TalkSPORT to provide some work and the mutuality of obligation test was met.
- Mr Hawksbee had to make himself available for work for at least 222 days per year and give TalkSPORT 'first call' on his services in connection with the show at all other times. This made it very difficult for him to work full-time for anyone else and pointed to employment status.
- The right for either party to terminate the contract on four months’ notice and for TalkSPORT to suspend Mr Hawksbee in certain circumstances made little sense if TalkSPORT was not obliged to provide him with work. These also pointed to employment status.
- There was a sufficient framework of control to satisfy the test for employee status. TalkSPORT had the ultimate right to decide on the form and content of each episode of the show and they had control over where and when Mr Hawksbee did his work.
- The other factors considered by the FTT were either outweighed or had no relevance once the UT had concluded that TalkSPORT was obliged to provide work.
Most of the recent IR35 cases have been FTT decisions which have no legal precedent. The other recent UT case involving a presenter, Christa Ackroyd Media v HMRC UKUT0326 also resulted in the decision that the taxpayer was an employee.
Links
Off-Payroll Working: At a glance
The new rules for IR35 and personal service companies from April 2020
Employment status
The employment status of an individual worker depends on whether the individual is engaged by the engager under a "contract of service", or a "contract for services".
IR35: Off-Payroll Working
What is IR35? How does it work? How is the deemed payment calculated? What expenses are deductible?
Employment status: Mutuality of obligation
What is mutuality of obligation? Why is it important in considering employment status?
Personal Service Company (PSC) tax
PSCs are subject to close scrutiny by HMRC and government as there is a wide-ranging belief that many PSCs do not operate the IR35 rules correctly.
External link
HMRC v Kickabout Productions [2020] UKUT 0216