The appellant was a personal services company.  It appealed against the decision of the Upper Tribunal relating to Tax that a radio presenter, Paul Hawksbee, was in an employment relationship with Talksport rather than it being through the company.  

The background was that the company contracted with Talksport so that Hawksbeewoud broadcast his weekday radio show.  He presented the show for 18 years and received 90% of his income through it.  There were two separate contracts. The first required Hawksbee to provide his services on an exclusive basis for at least 222 days per year. The second was for the company but that Talksport was not obliged to assign services to the appellant and the appellant was not obliged to accept the assignment. Under both contracts a fee was paid per programme presented.  HMRC decided that Hawksbee should be treated as an employee of Talksport for the purpose of national insurance and tax purposes. The Upper Tribunal agreed finding that the contract as a whole outlined a binding commitment by Talksport to provide work to Hawksbee. 

The arguments centred upon the factors which relate to employment status being found.  The Court of Appeal agreed with the Upper Tribunal’s assessment that Talksport could control how Hawksbeeperformed his duties and had rights of control of the tasks to be performed.  Additionally, they did not agree with the assertion by the appellant that there was no mutuality of obligation as a fee was only paid if the programme was performed.  The argument being that there was no obligation to make the programme.  This argument was not accepted and the Upper Tribunal’s position was accepted.   In examining the multi-factorial assessment under Ready Mixed Concrete the Court of Appeal outlined that the contracts created were an indicator of employment.  It was proper that the Tribunal took the length of the relationship prior to the contract.  In taking these factors together the appeal was dismissed with the finding that Hawksbee was regarded as an employee of Talksport for the purposes of national insurance and tax. 

Practical Lessons

This case demonstrates the impact of IR35 and the extent to which HMRC will be cognisant of those using companies for what is, in practice, an employment relationship. The factors as examined in determining the distinction between employees, workers and independent contractors will be taken into account here.  The length of the relationship and the creation of the contracts between the parties, even if the name on the contract was that of a company still pointed towards employment between the radio presenter and the radio company.  This would have a clear adverse effect on Hawksbee when it comes to national insurance and tax to be paid but HMRC need to ensure that such loopholes are tackled.  

https://www.gov.uk/tax-and-chancery-tribunal-decisions/the-commissioners-for-hm-revenue-and-customs-v-kickabout-productions-ltd-2020-ukut-0216-tcc