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Markel Tax

11 Aug 2020

Case law update: 2–0 to self-employed referees

The Upper Tribunal (“UT”) Judge calls the final whistle on time and upholds First Tier Tribunal (“FTT”) decision to give HMRC red card against self-employed referees in match officials case.

HMRC appealed the FTT decision on the grounds that the Tribunal had erred in law and the referees should be employees.  The UT dismissed this appeal and found in favour of Professional Match Official Limited (“PGMOL”).

PGMOL specialises in providing referees and match officials at various levels. FTT concluded that there was a lack of mutual obligations outside engagements so the overarching contract was not one of employment.

Mutuality of Obligation:

HMRC argued that payment in return for providing services was sufficient to establish mutuality of obligations between the parties.  They submitted a secondary argument in respect of a Code of Practice document issued by PGMOL.
The Code of Practice document states that referees are “expected” to adhere to it.  HMRC argued that “expected” should be read as “obliged”, arguing that the Code of Practice created mutual obligations between the referees and PGMOL
The UT dismissed HMRC’s view that payment in return for providing a service is sufficient enough to establish mutual obligations.

When considering HMRC’s argument, the UT ruled that, in order for there to be mutual obligations in existence, the following factors must be present:

  • The employee must perform at least some work personally. It is consistent with such an obligation that an employee can, without breaching the contract, decide in some circumstances to refuse work. However, it is inconsistent if the employee decides never to turn up for work, without breaching the contract.

  • The employer must provide work or some form of consideration in the absence of any work.

  • For both parties, the obligations must survive the whole period of the contract.

In respect of the Code of Practice document The UT rejected HMRC’s contentions, highlighting that the author of the Code of Practice used both “obligation” and “expected”, demonstrating a clear understanding of both terms and the difference between their meanings.

They agreed with the FTT’s statement that this was no ordinary situation. This was not a instance of an entity providing the services of a limited pool of highly skilled individuals on a regular basis; rather, the situation was that the referees were highly motivated individuals and wanted to make themselves available to officiate at football matches, meaning that there was no need for PGMOL to impose a legal obligation on them to provide their services.

The UT concluded that the FTT were correct to conclude that the absence of any obligation on PGMOL to provide work sufficiently demonstrates, as a matter of law, a lack of mutual obligations outside of specific engagements.


The UT took a different approach to the FTT in its consideration of control.
The UT held that it was not open to the FTT to conclude that PGMOL was unable to control the referees during the period of each individual contract. The UT ruled that just because PGMOL were unable to interfere during a match, this did not prove that the right of control does not and cannot exist for PGMOL.

Nevertheless, even though they held that the FTT had erred on this point, the UT did not come to the conclusion that PGMOL did, in fact, have a right of control, as the Ready Mixed Concrete test would have to be applied.


While the UT did not agree with the FTT’s conclusions in respect of control, they held that this did not affect their overall ruling.  The UT upheld the Decision of the FTT and accordingly dismissed HMRC’s appeal.

What can we learn from this?

This case highlights the disparity between HMRC’s view of mutuality of obligations and the Courts’ view of mutuality of obligation.  We have highlighted this difference of opinion to HMRC on many occasions.  We, and many other advisors, referenced this in HMRC’s consultation on IR35 and asked the government to address this matter and review their approach.

In light of the Tribunal’s account of what is required to demonstrate that mutuality of obligation exists, we can only hope this will now sway HMRC to adapt their view beyond the linear “work for wage” approach.

While the UT provides a welcomed confirmation of what is needed to establish mutual of obligations, it did come with a word of caution.  In this case, of significant importance, was the finding of fact that the individuals had the right to refuse work at any time.  The UT found this persuasive but cautioned that that this fact alone may not be of such significance in other cases. 

It would be remiss for engagers to rely too heavily on an Individual’s right to refuse work and we would always advise that all the factors which help to show a lack of mutuality of obligations are addressed and demonstrable.  

Of control the UT highlighted the importance of considering a right of control, and that simply because it may be impractical (or physically not possible) to exercise control it does not necessarily follow that a right of control does not exist. 

A right of control can be a particularly difficult argument to defend against which is why it is important engagers pay attention to the detail of all documentation they provide their self-employed workforce to make certain all key aspects of status have been fully dealt with.

This Decision provides a useful analysis of the minimum requirements needed to establish a contract of employment, and accords with the approach we at Markel Tax have always taken.  It gives engagers an additional reference tool when looking at the status of their own workforce.

For further information, please email Alex Lancett or contact at Markel Tax on 0333 920 5708.

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Tagged IR35 Fee protection insurance IR35
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