In one of a growing number of cases the First-tier Tribunal has held that the IR35 intermediaries rules applied to a sports presenter providing services through a personal services company.
The presenter worked on Sky’s live darts and boxing coverage and under the hypothetical contract envisaged by the legislation, the tribunal concluded that the individual would have been an employee of Sky but for the existence of his intermediary company.
This is just one of an increasing number of cases concerning the implementation of IR35 and reflects HMRC’s growing focus in this area. The tribunal particularly highlighted the following areas to justify their decision:
- Sky had significant control over the individual including the “first call” on the individual’s time. Although the individual had a high degree of autonomy in presenting, Sky controlled what he presented and also had control over the events they chose to broadcast, effectively giving them the decision as to his hours and place of work.
- There was sufficient mutuality of obligation under the terms of the hypothetical contract (which importantly the tribunal emphasised should be inferred both from the documents and from the conduct of the parties). Although according to the paperwork the annual fee was calibrated by reference to the number of days actually worked, in practice the same monthly fee had been paid throughout the period of the contract.
- Although there was a contractual right to appoint a substitute, this right was fettered as Sky only allowed a substitute with Sky’s consent. Furthermore Sky agreed to pay the substitute directly rather than the presenter paying the substitute.
This decision is a reminder of the importance of the conduct of the parties when assessing the terms of the hypothetical contract. With the extension of the off-payroll IR35 rules in April 2021, this is going to become a larger issue for many companies and their contractors.
If you are impacted by IR35 and the new rules relating to off-payroll working, please contact our Employment Team on 0345 646 0406 or fill in our online enquiry form and a member of our Team will be in touch.