In Alan Parry Productions Ltd v HMRC [2022] TC08519, the First Tier Tribunal (FTT) held that the control and mutuality of obligation tests were satisfied. The terms of Mr Parry’s contracts with BSkyB were consistent with him being an employee.

Alan Parry Productions Ltd (APPL) is the Personal Service Company of Alan Parry, a football commentator who has commentated for BSkyB (Sky) for many years. Mr Parry contracted with and provided services to Sky through APPL.

  • The contracts provided (there were four over the years, all broadly similar) that:
    • APPL would provide the services of Alan Parry as a commentator, presenter, interviewer or other participant in any programme on an ad hoc basis, as and when required by Sky.
    • The assignments were for fixed periods and fees, plus expenses, for a fixed number of matches per year.
    • Sky determined where the services were to be provided (at the grounds or studio) and required Mr Parry to travel accordingly including on bank holidays and weekends and anti-social hours.
    • APPL could provide a substitute subject to Sky’s prior approval. On the one occasion, Mr Parry missed a match Sky used someone from their own talent pool.
    • Sky had first call on Mr Parry and control over his use of social media insofar as it related to Sky. He could not not provide services to any other media organisation without the prior approval of the head of Sky Sports. 
    • Sky controlled the programme and its timing. As Mr Parry’s commentaries were live his work was unscripted. He had a close interaction with the producer, director and editor.
    • Sky could only terminate the contract for cause or because of extraneous events beyond Sky’s control.
  • HMRC raised PAYE and NIC determinations totalling £356,421 on the basis that IR35 applied for the periods 2013-14 to 2018-19. APPL Appealed.

The FTT dismissed the appeal.

  • There was Mutuality of obligation:
    • The evidence indicated there was a right of substitution but it was clear that what Sky wanted was Mr Parry’s own personal services and not the services of any other commentator whom he might propose.
    • Mr Parry was obliged to provide his services to Sky as and when required, though for a limited number of matches per year. Sky was obliged to pay him the fixed amounts specified in the contracts.
    • Sky could compel Mr Parry to perform roles other than that of a commentator.
    • There was sufficient control to indicate an employer/employee relationship. Whilst there was no reason for Sky to exercise its rights of control because Mr Parry acted in a manner of which they approved, Sky had control over the “what, how, when and where” as it could:
      • Determine the matches for which it required Mr Parry's services.
      • Determine where the services were to be provided from and direct him to travel there at any time and date.
      • Direct Mr Parry to attend to advertise Sky’s programmes and services.
      • Direct Mr Parry on the manner in which he provided the services.
      • Direct the content of his social media insofar as it related to Sky.

Notwithstanding certain factors pointing the other way (absence of training, editorial guidelines and formal appraisals, and obligation to correct defective work at APPL’s own expense), the judge took a step back and concluded that the overall impression was that the relationship between Sky and Mr Parry was one of employment. Mr Parry was not carrying on business on his own account when he provided services for Sky. He was instead providing his services under contracts of service.

Useful guides on this topic

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 the government as there is a wide-ranging belief that many PSCs do not operate the IR35 rules correctly.

External link

Alan Parry Productions Ltd v HMRC [2022] TC08519 

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