In Paul Collingwood v HMRC [2025] TC09624, the First Tier Tribunal (FTT) found that cricket sponsorship income, which had been assigned to a former England cricketer's company, should have been assessed as profits from self-employment.
Mr Collingwood assigned his Intellectual Property rights, which included sponsorship income, to his limited company. HMRC believed that Mr Collingwood was the person legally entitled to the payments, and as such, they should have been assessed as self-employment profits.
- Mr Collingwood was a professional cricketer employed by Durham County Cricket Club from 1995 up until 2018, when he retired from the sport.
- By way of agreement dated 21 January 2005, Mr Collingwood purported to assign all publicity rights, which included the sponsorship income, to his company, meaning he had no legal right to benefit from the rights.
- The sponsorship income was then taxed on the company, and not Mr Collingwood.
- An earlier enquiry by HMRC into sponsorship income had been closed, leading Mr Collingwood to assume there was a 'legitimate expectation' that HMRC accepted the sponsorship income should be assessed on the company and not Mr Collingwood himself.
- Following an enquiry, HMRC issued Closure notices charging additional tax totalling £196,187.
- Mr Collingwood appealed to the First Tier Tribunal (FTT).
Two issues were addressed:
- Whether Mr Collingwood was liable to Income Tax under:
- Sections 8 and 5 of ITTOIA 2005 as the person 'receiving' or 'entitled to' trading profits.
- Section 687 IITOIA 2005, 'charge to tax on income not otherwise charged'.
- Regarding the earlier enquiry, whether Mr Collingwood had a 'legitimate expectation' that the amendments would not be made, which in turn required consideration of whether the FTT had the jurisdiction to consider public law arguments.
The FTT found that:
- The contractual agreements made between parties usually provide a starting point and are generally conclusive.
- A 'subjective intent' between the parties was not sufficient to be relied on.
- After considering the agreements in place, the FTT found there was no evidence to support that Mr Collingwood had no legal right to benefit from them.
- The contracts were with Mr Collingwiid as an individual and, therefore, he was liable to tax.
- For a legitimate expectation to have arisen, a promise or representation relied upon must be clear, unambiguous and devoid of relevant qualification.
- No such statement was found in this case.
- The argument was public law, and the FTT therefore had no jurisdiction.
The appeal was dismissed.
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