ICAS ICAS logo

Quicklinks

  1. About Us

    Find out about who we are and what we do here at ICAS.

  2. Find a CA

    Search our directory of individual CAs and Member organisations by name, location and professional criteria.

  3. CA Magazine

    View the latest issues of the dedicated magazine for ICAS Chartered Accountants.

  4. Contact Us

    Get in touch with ICAS by phone, email or post, with dedicated contacts for Members, Students and firms.

Login
  • Annual renewal
  • About us
  • Contact us
  • Find a CA
  1. About us
    1. Governance
  2. Members
    1. Become a member
    2. Newly qualified
    3. Manage my membership
    4. Benefits of membership
    5. Careers support
    6. Mentoring
    7. CA Wellbeing
    8. More for Members
    9. Area networks
    10. International communities
    11. Get involved
    12. Top Young CAs
    13. Career breaks
    14. ICAS podcast
    15. Newly admitted members 2022
    16. Newly admitted members 2023
  3. CA Students
    1. Student information
    2. Student resources
    3. Learning requirements
    4. Learning updates
    5. Learning blog
    6. Totum Pro | Student discount card
    7. CA Student wellbeing
  4. Become a CA
    1. How to become a CA
    2. Routes to becoming a CA
    3. CA Stories
    4. Find a training agreement
    5. Why become a CA
    6. Qualification information
    7. University exemptions
  5. Employers
    1. Become an Authorised Training Office
    2. Resources for Authorised Training Offices
    3. Professional entry
    4. Apprenticeships
  6. Find a CA
  7. ICAS events
    1. CA Summit
  8. CA magazine
  9. Insight
    1. Finance + Trust
    2. Finance + Technology
    3. Finance + EDI
    4. Finance + Mental Fitness
    5. Finance + Leadership
    6. Finance + Sustainability
  10. Professional resources
    1. Anti-money laundering
    2. Audit and assurance
    3. Brexit
    4. Charities
    5. Coronavirus
    6. Corporate and financial reporting
    7. Business and governance
    8. Ethics
    9. Insolvency
    10. ICAS Research
    11. Pensions
    12. Practice
    13. Public sector
    14. Sustainability
    15. Tax
  11. CPD - professional development
    1. CPD courses and qualifications
    2. CPD news and updates
    3. CPD support and advice
  12. Regulation
    1. Complaints and sanctions
    2. Regulatory authorisations
    3. Guidance and help sheets
    4. Regulatory monitoring
  13. CA jobs
    1. CA jobs partner: Rutherford Cross
    2. Resources for your job search
    3. Advertise with CA jobs
    4. Hays | A Trusted ICAS CA Jobs Partner
    5. Azets | What's your ambition?
  14. Work at ICAS
    1. Business centres
    2. Meet our team
    3. Benefits
    4. Vacancies
    5. Imagine your career at ICAS
  15. Contact us
    1. Technical and regulation queries
    2. ICAS logo request

Sporting celebrities at a loss in the status stakes

  • LinkedIn (opens new window)
  • Twitter (opens new window)
Justine Riccomini By Justine Riccomini, Head of Taxation (Scottish Taxes, Employment and ICAS Tax Community)

18 September 2020

Key points:

  • Two interesting case decisions have been published relating to IR35 and employment status
  • These subjects are perennially problematic
  • The cases highlight the ongoing lack of clarity for employers, engagers and advisers

Justine Riccomini provides an overview of two recently published decisions on IR35 from the Upper Tribunal and employment status from the Employment Appeal Tribunal where the two taxpayers wanted opposite outcomes, and both lost.

A more detailed summary of both cases can be found in the ICAS Technical Bulletin for subscribers.

Case 1 - Kickabout is within IR35 - Background

ICAS reported last year on the FTT case of Paul Hawksbee T/A Kickabout Productions Ltd v HMRC, which is an IR35 case concerning itself with a Talksport Radio presenter and whether his contract was a deemed employment contract through his intermediary company.  In the First Tier Tribunal, the Judge and the lay member came to conflicting decisions, but as the Judge has the casting vote, the decision was made in Mr Hawksbee’s favour that IR35 did not apply.

Given the split decision, HMRC saw no reason not to appeal the case and the latest Upper Tribunal decision is the result of that appeal. Unfortunately for Mr Hawksbee, the UT reversed the FTT decision and decided that IR35 did in fact apply to the circumstances.

MOO prevails again

Even though Mr Hawksbee had carried out the same work for Talksport Radio for 18 years by the time the case reached the FTT, the contracts examined covered the years 2012-13, 2013-14 and 2014-15.

The two contracts in existence during this time period contained different provisions about Mutuality of Obligation (MOO) – the first contained no written provisions and the second denied its existence.

The UT found that MOO not only existed based on the facts of the case but that it without question pointed towards an employment relationship due to the existence of a hypothetical contract of employment. Yet HMRC continues to ignore the concept in its Check Employment Status for Tax (CEST) Tool.

When, where, how?

The UT found the radio station could control what, when and where the tasks in question were performed – even though Mr Hawksbee had discretion as to ‘how’ he performed those tasks.  Naturally this was found to constitute sufficient control for an employment relationship to exist in addition to the MOO factors above.

Personal service

HMRC were able to show that Mr Hawksbee was contractually prohibited from providing a substitute and had to undertake his work exclusively for Talksport radio.

Not in business

The above factors trumped the evidence given which pointed towards self-employment, such as the lack of entitlements to statutory pay, leave, training or medicals, the fixed fee arrangements and not being considered ‘part and parcel’ of the organisation.

Summary

It is important to note that the method used to decide the case outcome differed slightly from the holistic overview methodology as set down in Hall v Lorimer [1994] STC 23 which has been the common approach used ever since in status cases. In this case however, a strict order was maintained, in that the first priority was to examine MOO, followed by control and then everything else.

If HMRC considers this mechanical approach to now override the principles set down in Hall v Lorimer, the department may finally have to admit that the CEST Tool must also consider MOO as a matter of course.

Case 2 - Varnish is not an employee or worker – Background

Jess Varnish, Former Great Britain Cyclist who lost her original case against the British Cycling Federation (BCF) and UK Sport at the Employment Tribunal (ET) in 2019 has now also lost the Employment Appeal Tribunal (EAT) case she brought against the sporting body.

Ms Varnish’s “Athlete Agreement” was terminated by the BCF just prior to the 2016 Olympics on account of performance-related issues. Her claim to the ET centred around unfair dismissal and unlawful detriment due to her having made protected disclosures under the Employment Rights Act 1996 (ERA), and direct sex discrimination and victimisation under the Equality Act 2010 (EqA).

The ET decided her claim for unfair dismissal under ERA 1996 was invalid because her relationship with British Cycling and UK Sport (or both bodies jointly under a tripartite arrangement) was neither one of an employee nor a worker (for the protected disclosures element). The main reason for this was that Varnish was not, in their view, personally performing work for remuneration (the EqA element).

The Ready Mixed Concrete case provided the normative initial starting point for establishing MOO.

Missing MOO

The basis of the contractual terms was examined and the following facts considered:

  • Varnish has applied to and won Lottery funding via UK Sport to support her Athlete Agreement. No funding was provided by British Cycling or UK Sport.
  • The sum payable to Varnish was characterised as a grant based on assessment of future potential
  • Varnish had not agreed to provide work but had instead agreed to train, with the ultimate aim of “achieving success in international competition”
  • MOO was found to be absent from the contractual terms due to the above points, and notably, the tests for control and personal service did not need to be established because the “irreducible minimum” element of MOO was absent.

Unlike in Kickabout, the EAT applied the overview test in Hall v Lorimer and concluded that the overall situation did not paint a picture of a contract of employment. The claim that Varnish was a worker also failed due to the fact that there was no “work” which Varnish had been obliged to personally perform.

Precedent?

It remains to be seen whether Varnish will be able to build a case for errors of judgement by the EAT which will allow her to seek permission to appeal to the Court of Appeal.

Do you have any thoughts? Send us an email on tax@icas.com or start a discussion on CA Connect, the ICAS members’ forum.

The Future of Taxation in the UK

By Charlotte Barbour, Director of Taxation and Susan Cattell, Head of Tax Technical Policy

10 June 2020

Mutuality of Obligation once again defeats HMRC when Upper Tribunal blows the whistle

By Justine Riccomini, Head of Taxation (Scottish Taxes, Employment and ICAS Tax Community)

19 May 2020

2-23-marsh 2-23-marsh
ICAS logo

Footer links

  • Contact us
  • Terms and conditions
  • Modern slavery statement
  • Privacy notice
  • CA magazine

Connect with ICAS

  • Facebook (opens new window) Facebook Icon
  • Twitter (opens new window) Twitter Icon
  • LinkedIn (opens new window) LinkedIn Icon
  • Instagram (opens new window) Instagram Icon

ICAS is a member of the following bodies

  • Consultative Committee of Accountancy Bodies (opens new window) Consultative Committee of Accountancy Bodies logo
  • Chartered Accountants Worldwide (opens new window) Chartered Accountants Worldwide logo
  • Global Accounting Alliance (opens new window) Global Accounting Alliance
  • International Federation of Accountants (opens new window) IFAC
  • Access Accountancy (opens new window) Access Acountancy

Charities

  • ICAS Foundation (opens new window) ICAS Foundation
  • SCABA (opens new window) scaba

Accreditations

  • ISO 9001 - RGB (opens new window)
© ICAS 2022

The mark and designation “CA” is a registered trade mark of The Institute of Chartered Accountants of Scotland (ICAS), and is available for use in the UK and EU only to members of ICAS. If you are not a member of ICAS, you should not use the “CA” mark and designation in the UK or EU in relation to accountancy, tax or insolvency services. The mark and designation “Chartered Accountant” is a registered trade mark of ICAS, the Institute of Chartered Accountants of England and Wales and Chartered Accountants Ireland. If you are not a member of one of these organisations, you should not use the “Chartered Accountant” mark and designation in the UK or EU in relation to these services. Further restrictions on the use of these marks also apply where you are a member.

ICAS logo

Our cookie policy

ICAS.com uses cookies which are essential for our website to work. We would also like to use analytical cookies to help us improve our website and your user experience. Any data collected is anonymised. Please have a look at the further information in our cookie policy and confirm if you are happy for us to use analytical cookies: