Another IR35 case for TV presenters goes HMRC’s way

The First Tier Tribunal rejected an appeal by ‘Little Piece of Paradise Ltd’ against PAYE/NIC determinations raised by HMRC for contracts entered into by Sky TV.  Yes, HMRC has shifted its gaze from BBC & ITV to Sky… Although it should be noted that this case involved tax years prior to the new off-payroll working rules commencing.  

Little Piece of Paradise Ltd [2021] TC 08300

Dave Clark is a TV sports presenter (darts – is darts really a sport though?) working via an intermediary company, Little Piece of Paradise Ltd (‘the company’) of which he is a 70% majority shareholder and director. Mr Clark set up the company in 2003 at Sky’s request, no doubt due to Sky’s view that the previous sole trader arrangements could represent a high risk of employment.

The contract(s) with Sky required presenting and commentating at professional darts tournaments over 64 days a year, for which an annual fixed fee (payable in monthly instalments) was paid.

The FTT followed the standard three stage approach as set out in Ready Mixed Concrete in their review of the arrangements and found:

• There was a substitution clause in the contract, however, Sky required the personal services of Mr Clark. Whilst the company contended that a substitution had been provided, the substitute was an existing Sky commentator who required Sky’s determination that he was suitable and was paid directly by Sky
• Although the darts competitions themselves determined dates and places, it was Sky who decided which events to cover. Sky also had ‘first call’ on Mr Clark’s time. Sky therefore controlled the ‘what, where and when’ services were to be provided.  Whilst the ‘how’ leant towards Mr Clark in that he wrote his own scripts, prepared in his own studio, the FTT felt that the ‘how’ was restricted due to Ofcom guidelines, Sky’s Editorial guidelines and the directions of the programme producer
• Sky also stipulated various covenants, non-solicitation clauses, non-disclosure clauses and approval of Mr Clark’s non-Sky work. The FTT felt that Sky had absolute control over the exploitation of Mr Clark’s work
• Although Mr Clark had his own studio, Sky would supply equipment and therefore the use of his own studio was merely a matter of personal choice
• Sky arranged his travel, met travel expenses and met the cost of ‘performance clothing’. Sky also provided a coat and microphone showing the Sky logo for on-screen use

The FTT therefore held that there was sufficient factors across the arrangements to indicate employment.

BUFDG commentary

Reading through the different indicators of the case, it didn’t pass the smell test.  Tribunals and the courts are focusing on the distinct levels of control contractually obligated and exercised by the parties and testing whether those controls stand up under scrutiny when looking at how the arrangements work in practice.  Although mutuality of obligation is mentioned in the tribunal summary, we are still not given any degree of certainty on how it may or may not apply.