Professional Games Match Officials Limited case into extra time

The long-awaited Supreme Court (SC) ruling in the HMRC vs Professional Games Match Officials Limited (PGMOL) tax case has been released.

The ruling provides clarity in determining whether an individual's services constitute an employment relationship or genuine self-employment.

A summary of arrangements

PGMOL would enter into an overarching contract with professional part-time referees and would invite the referees to officiate at a football match, which the referee could accept or decline. Furthermore, both parties could back out of the arrangement after the invitation was accepted.

Referees were required to pass a fitness test and attend an introductory seminar. PGMOL also had its own disciplinary procedures for referees who breached the rules, which could result in suspension or removal from the referees list.

The outcome

The SC confirmed that providing personal services in return for a wage or remuneration are required for mutual obligations to exist, even when an overarching contract is in place and in this case, were created when the referee accepted each match appointment.

The SC also confirmed a sufficient framework of control was also present and consistent with an employment relationship.

With these two tests met, the case is now headed back to First-tier Tribunal (FTT) to consider the employment status of the engagements.

What does this mean?

In simple terms, where a framework of control (or right of control) over an individual exists, and the individual accepts the work offered and receives payment for those services, it is necessary to look at all other factors of the engagement to determine if the engagement is a deemed employment or self-employment relationship.

This bar is lower than previously thought when testing whether mutual obligations exist or a framework of control is in place. Still, these are not determinative that an employment relationship exists.

What should you do?

When engaging with individuals paid outside the payroll you should consider whether the individual provides their service in return for payment, assess if a framework of control exists, and where it does, consider all factors to determine the employment status of the engagement.

Pay particular attention to arrangements where there is an overarching contract in place as this no longer seems sufficient to avoid mutual obligations.

How can Crowe help?

Using our experience and knowledge of employment status case law, our team of employment tax specialists can help those organisations assess whether they are required to determine the employment status of the engagement and arrive at employment status decisions.

Our specialists also help organisations comply with the tax legislation by determining which IR35 rules apply according to their size, and implement robust processes and controls underpinned with sound governance.

If you would like to share your thoughts for this court case or you would like to know more information, please contact Glen Huxter.