Contractors' Questions: What should contractors take from the Talksport IR35 case?
Contractor’s Question: Are there any other takeaways for contractors from the Talksport IR35 case of Paul Hawksbee? It was a narrow win so I’m interested in what edged it for him.
Expert’s Answer: The case of Kickabout Productions Ltd v HMRC is yet another IR35 case involving a well-known personality, specifically, Paul Hawksbee, a presenter on the Talksport radio station.
It seems the tribunal were split as to the nature of the hypothetical contract between Paul Hawksbee and Talksport; the tribunal judge having the casting vote concluded that the hypothetical contract would be one for services and consequently IR35 could not apply.
The casting vote was made on the finding that the hypothetical contract would have the following characteristics:
- No obligation on Talksport to provide work.
- Controlled services largely restricted to delivering the show.
- No right to holiday, sick pay, pensions or paternity leave.
- No provisions regarding medicals, training, etc.
- A payment obligation restricted to a fee for each show delivered, with no retainer or bonus.
- An individual who, while clearly synonymous with the show, is not part and parcel of the Talksport organisation.
Those contractors who are aware of historic case law on employment status, in particular; the three fundamental factors that are required in a contract in order for a contract to be of employment, will note that the list above includes the mention of obligation (which, it would seem was only one-sided and therefore not mutual). And it also includes Control – which it was found was limited to the delivering of the show.
These factors on their own, based on historic case law, would mean the contract could not be one of employment. However, the Tribunal did not believe the two factors, in this case, were decisive.
The judgement is further complicated (and perhaps ripe for an appeal by HMRC), as the tribunal member came to the conclusion that the hypothetical contract between Paul Hawksbee and Talksport would be one of employment.
The case again highlights the sensitive nature of employment status and of course the complexities of interpreting those facts in order to determine the correct employment status.
The expert was Shyam Pattani, director of tax, VAT and employment law specialists Chartergates.