In Kickabout Productions Limited v HMRC  EWCA Civ 502, the Court of Appeal agreed that a TalkSPORT presenter, Paul Hawksbee was an employee subject to IR35. There was sufficient mutuality of obligation and control and any other factors considered added little to the case.
- Kickabout Productions Limited (KPL) provided the services of Paul Hawksbee as a radio broadcaster to TalkSPORT (TS) where he co-presented a daily show.
- HMRC raised assessments of £143k in Pay-As-You-Earn (PAYE) and National Insurance Contributions (NICs) over a three-year period on the basis that the company was within the IR35 Off-Payroll Working rules.
The First Tier Tribunal (FTT) narrowly decided that 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 neither as TS had no obligation to provide work and the services they controlled were restricted to delivering the show.
The Upper Tribunal disagreed finding that he was an employee:
- The express engagement of KPL for a fixed-year period to provide services such as presenting the three-hour daily show Monday to Friday, preparation and rehearsals, meant that 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 TS 'first call' on his services which pointed to employment status.
- The right for either party to terminate the contract on four months’ notice and for TS to suspend Mr Hawksbee in certain circumstances made little sense if TS was not obliged to provide him with work.
- There was a sufficient framework of control to satisfy the test for employee status. TS had the ultimate right to decide on the form and content of each episode and had control over where and when Mr Hawksbee did his work.
- The other factors considered by the FTT (workers rights such as sick and holiday pay, medicals, training, paternity leave pensions etc) were either outweighed or had no relevance once the UT had concluded that TS was obliged to provide work.
The Court of Appeal dismissed KPL’s appeal finding that there was mutuality of obligation:
- The express terms of the contracts between TS and KPL included an obligation on TS to offer the number of programmes (three hours, Monday to Friday for at least 222 days per year over a two year period) that Mr Hawksbee was required to present.
- The contracts contained a right to suspend Mr Hawksbee in certain circumstances: this provision would have little purpose if TS could in any event not offer any programmes to KPL.
On the matter of control the Court agreed with the UT’s findings saying that KPL had disclosed no error of principle or approach by the UT in their grounds of appeal.
The Court went on to find that:
- The UT was entitled to conclude that an absence of workers’ rights in the contract did not count greatly in determining Mr Hawksbee’s status as if there was an employment relationship he would enjoy the rights conferred by law on employees anyway.
- Given the particular nature of Mr Hawksbee's services the UT was entitled to say that it did not think that “an impressionistic analysis of whether Mr Hawksbee was 'part and parcel' of Talksport's organisation would weigh heavily in the balance” while accepting that "in other cases, analysis whether someone is 'part and parcel' of an organisation will be illuminating".
The decision was released on the same day as another Court of Appeal IR35 case decision, HMRC v Atholl House Productions Limited  EWCA Civ 501, where the Court found that TV presenter Kaye Adams was also an employee, in that case overturning the decisions of the lower courts who had found in Ms Adam's favour.
Useful guides on this topic
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
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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.