HMRC V Professional Game Match Officials Ltd [2020] UKUT 147

Background

Professional Game Match Officials Ltd (PGMOL) provides the service of match officials to the FA recognised leagues and competitions, such as the Championship and the FA Cup.

HMRC made tax decisions and determinations concerning PGMOL on the basis that PGMOL are employers to the National Group referees.

PMGOL appealed to the First-Tier Tribunal (FTT) against those tax determinations and decisions. PGMOL argued that their referees are self-employed rather than employed.

The First-Tier Tribunal's decision

In 2018, the FTT (Judge Sarah Falk and Member Janet Wilkins) allowed the appeal, concluding that the National Group referees were not employed under contracts of service during the relevant periods. Referees were self-employed.

In 2020, HMRC appealed against the FTT decision that there was an insufficiency of mutuality of obligation to determine PGMOL as employers to the part-time referees.

Why is it important?

Employment status has become a hot topic in today's flexible "gig" economy, especially since the government announced that from April 2021, businesses and organisations in the private sector will have to determine the employment (tax) status of any contractors they engage - representing a huge shift in employment tax.

Whether an individual is employed or self-employed has significant implications on the tax contributions (i.e. income tax) for the individual and also for the employer. If PGMOL was found to be an employer to the referees, they would end up paying a significant amount of tax and national insurance.

The Upper Tribunal's decision

Mutuality of obligation refers to the employer's obligation to give work and the employee's obligation to complete it. It is a key test in establishing a contractor's employment status.

The Upper Tribunal found that certain football match referees were self-employed and dismissed HMRC’s arguments on mutuality of obligation.

The appeal was dismissed.