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Employment Status

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Are part-time football referees employees, whose match fees and other payments are subject to PAYE, or independent contractors?

Independent Contractors, held the Upper Tribunal (Tax and Chancery Chamber) in Revenue and Customs v Professional Game Match Officials Ltd.

The referees in this tax appeal were engaged by Professional Game Match Officials Limited to officiate at matches, primarily in Leagues 1 and 2 of the Football League, but also in the Championship and the FA Cup, and by way of 'Fourth Official', in the Premier League. These 'National Group' referees undertake refereeing duties in their spare time, typically alongside other full-time employment. HMRC issued assessments for PAYE and national insurance on the basis that PGMOL is the employer of the National Group referees. PGML appealed to the First Tier Tribunal.

The FTT concluded that there was both an overarching annual contract between PGMOL and each of the National Group referees and a series of separate contracts between PGMOL and each National Group referee in relation to each specific match for which that referee was engaged.

On the old authority of Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance, two key elements of a contract of service are identified as 'mutuality of obligation' and 'control'. These elements, said the FTT, were lacking in both contracts. HMRC appealed to the Upper Tribunal.

This summary cannot do justice to the impressive survey of modern cases on employment status by the Upper Tribunal. In simple terms it agreed with the FTT on the issue of mutuality of obligation. It considered that the referees were highly motivated and would in practice make themselves available as much as possible, such that "there [was] no need for a legal obligation". Even as far as the individual contracts were concerned, it was correct to put weight on the fact that engagements could be cancelled by PGMOL and referees could fail to attend without being considered in breach of contract.

On the control point the FTT had placed too much store on the fact that PGMOL could not step in while a referee was performing an engagement at a match. The right of a putative employer to control a skilled person needs a much more nuanced analysis. But as the finding of lack of mutuality obligation had decided the point on employment status, it was not necessary to explore the control argument further. 

Thanks to Dr John McMullen of Stone King LLP for preparing this case summary.