The UK Supreme Court has dismissed an appeal by the Professional Game Match Officials Limited (PGMOL) challenging a £584,000 ($772.23m) tax bill imposed by HMRC.
The decision marks the latest development in a legal battle concerning the employment status of 60 referees and their associated tax obligations for the years 2014-15 and 2015-16.
HMRC initially issued the tax bill after concluding that PGMOL should have made taxation and National Insurance contributions for the referees.
PGMOL, which supplies officials for elite football competitions, including the Championship League and the FA Cup, had contested that the referees were not employees but independent contractors.
The case has been progressing through the UK’s legal system since 2018, with the First-tier Tribunal initially ruling in favour of PGMOL.
However, HMRC’s appeal to the Upper Tribunal upheld the original decision, which was then challenged in the Court of Appeal in 2021. The Court of Appeal sided with HMRC and sent the case back to the First-tier Tribunal for a review of specific issues.
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By GlobalDataAfter a 15-month deliberation, the Supreme Court’s dismissal of PGMOL’s appeal means the case will now return to the First-tier Tribunal.
The outcome of this landmark case has been closely watched by businesses and tax professionals due to its implications for employment status and tax liability.
This decision means that the case, concerning the tax status of 60 football referees employed between 2014 and 2016, will be remitted back to the First Tier Tribunal for further review.
Law firm Osborne Clarke consultant, Frances Lewis said: “The decision confirms that, for tax purposes, sufficient mutuality of obligation can exist during a number of separate contracts even where either party can cancel without penalty, and that sufficient control can exist even where the end user has no contractual right to intervene in every aspect of the performance of the work by the worker.”
Employment status and IR35 expert Qdos CEO Seb Maley said: “This is a landmark case that puts the issue of employment status firmly on the radar of all businesses.”
“The fact that it will be reheard at another First Tier Tribunal shows how complex employment status can be,” he noted.
In the year ending 31 March 2024, HMRC opened investigations into 20 football clubs, 83 football players, and 21 football agents.
More than £384m ($507m) in unpaid taxes has been collected as a part of these crackdowns in the last five years.
