Ex-Liverpool star loses IR35 case
The First-tier Tribunal (FTT) has found in favour of HMRC regarding the application of IR35 rules to former Liverpool and England footballer Phil Thompson’s work for Sky. What’s the full story?
HMRC asserted that additional tax of almost £300,000 was payable because Phil Thompson’s (T’s) work for Sky, via his personal service company, was inside the IR35 rules. The rules essentially ensure that PAYE income tax and Class 1 NIC are due if a contractor would be an employee but for the insertion of an intermediary, e.g. a personal service company. Many TV personalities, radio presenters and sports commentators have found their careers being scrutinised at the tax tribunals and higher courts over the same issue in recent years, with very mixed results.
This time, HMRC was victorious, and the FTT agreed that the anti-avoidance legislation did apply. This is because the relationship between T and Sky was consistent with that of employment, due to the lack of income from other projects and the level of control Sky had over T’s other work. Each of these cases is highly dependent on the specific facts but, in similar cases won by the taxpayer, the individual is usually very well established and involved in many different projects because of that. In contrast, T is only closely associated with the TV programme he works on at Sky TV.