HMRC has confirmed it will not appeal a court ruling that football referees affiliated with Professional Game Match Officials Ltd (PGMOL) are self-employed rather than employees, drawing a line under long-running employment status disputes pursued by tax authorities.
In a statement provided to IR35 Shield, an HMRC spokesperson said: “The court ruled that these referees are not employees on the particular facts of this case, and we will not appeal this decision. Taking this case to the High Court was important because it clarified how to distinguish between employees and self-employed workers for tax purposes, and confirmed our long-term approach.”
The settlement brought to an end a case that had dragged on for the better part of a decade and even reached the state’s highest court. The Supreme Court issued its decision in September 2024, ruling that the responsibility and control tests were both met, before sending the matter back to the Court of First Instance to weigh the relationship in this round. When the court applied for that last section, it found that the referees had no signs of employment.
For Dave Chaplin, chief executive of the IR35 Shield and regular presence at PGMOL meetings, HMRC’s planning of the outcome sits uncomfortably with the outcome.
“HMRC continues to say that its long-term approach to employment status is correct, which begs the question of why they’ve made the referee’s mistake for 10 years,” Chaplin said.
His main criticism concerns the relevancy of responsibility, a principle that has long been a battleground in the status quo. “HMRC has always argued that the existence of an obligation means payment for work completed. However, the High Court ruled differently, confirming that the nature of the obligations between the parties was central to determining employment status.”
The difference is most important outside the touchline. The relevance of the obligation depends on whether the party involved is obliged to give the work and the worker is obliged to accept it. In the case of the umpire, the responsibilities are reset after every game, without either side committing to future appointments, a feature that the court takes to mean.
Chaplin reserved his harsh words for HMRC’s Check Employment Status for Tax (CEST) tool, an online questionnaire businesses are encouraged to rely on when determining a contractor’s status.
“When the facts of a case are entered into HMRC’s Tax Employment Status Assessment (CEST) tool, it fails to reach the correct conclusion, instead returning an ‘indeterminate’ result and suggesting that the case is well balanced,” he said. “The judge had the opposite opinion, he said that the case is not fair and that the referees do not show signs of employment.”
It is a cost that will affect contractors and their partners who are wary of this tool. Business Matters previously reported that HMRC’s updated CEST tool still poses a threat to compliance, and that faith in the tool has fallen so far that only around 10 per cent of contractors use it, down from around 28 per cent when it was introduced. If the instrument cannot match the conclusion of a judge given the same facts, the case for treating its exit as a safe harbor seems slim.
The PGMOL result remains on the list of highest defeats which tied HMRC’s record for the situation. Television presenters including Kaye Adams, who won her IR35 case against HMRC after a nine-year battle, have spent years and huge sums of money defending the taxpayer through arrangements which the courts have ruled to be self-employed.
For businesses and individuals caught in the middle, the lesson is uncomfortable but clear. The situation is determined by the full picture of the working relationship, not in one place and not in a one-size-fits-all questionnaire. HMRC may insist that its approach is proven, but a ten-year pursuit that ended in defeat, and a tool that can’t call for an outcome, tells a more complex story.
