Sky Sports presenter Dave Clark loses IR35 case due to ‘poor defence and attack’

The attack and defence of a Sky Sports presenter let him down in an IR35 case carrying a tax liability of over £281,000 – now incoming to HMRC.

Dave Clark, who presented darts and boxing until retiring with Parkinson’s disease in 2020, was trying to fight HMRC’s claim the Intermediaries legislation caught him from 2013-2018.

But aside to moves by Sky undermining his chances, IR35 experts say the sports anchor’s goal of outside IR35 status was thwarted by his defensive and offensive plays lacking.

'Little evidence put forward of IR35 not applying'

Reflecting on Mr Clark, of Little Piece of Paradise Ltd, being represented by his accountant -- who HMRC appointed counsel to fight, status expert Kate Cottrell told ContractorUK:

“As to the stated reality of the working practices, as set out by both parties, there was little evidence provided in support of IR35 not applying.

“For example, Mr Clark claims he organised…a Mr Studd as a substitute but then provided nothing to support this…[yet] HMRC showed Sky already knew him and paid him directly.” 

Rebecca Seely Harris is another expert on IR35 who, like Ms Cottrell, Her Majesty’s Treasury has previously seconded to its ranks to advise the government on the legislation.

'An attack that ended up pointing to Mutuality'

In a statement to ContractorUK, she too pointed to deficiencies in the attempt of Mr Clark’s team to overturn HMRC’s assessment, notably on the contractual side.

“By Clark’s limited company -- LPPL, [it was] claimed that a termination clause ‘de facto gives Sky the option to terminate the contract at will’,” Ms Seeley Harris began. 

“But the tribunal pointed out that not only did it not do that, but that successive contracts [Mr Clark had] which had the termination clauses in, indicated there were mutual obligations”.

'Naive'

Another adviser to contractors (who declined to be named) confirmed that based on his initial reading of judge Heidi Poon’s ruling, the sport’s presenter’s strikes were a bit off-target.

“Sometimes I think a lot of problems are self-inflicted,” said the adviser. “In a Little Piece of Paradise, a big part of the nightmare is due to naïve arguments with no prospect of success.”

However, Mr Clark could now appeal the case again and, with new arguments in place, may succeed in overturning the FTT judge’s decision, says status adviser Seb Maley.

'Restricted'

An IR35 contract reviewer at Qdos, Mr Maley is critical of the broadcaster, not the broadcast professional, who worked for BskyB on a self-employed basis until it told him to incorporate.

“The judge’s view was that Clark was subject to control by Sky, who also paid him whether he worked or not,” he said. “What’s more, he was restricted from presenting for other[s]”.

“A read of the contractual terms [Sky offered] raises very serious alarm bells,” confirms Ms Cottrell, the co-founder of status advisory Bauer & Cottrell.

“A fettered substitution right, personal service and ‘first call’ call on him, plus clear mutuality of obligation by way of being paid whether work was done or not.”

'Riddled with control'

She added: “All that via a two-year contract with occasional invoicing up front, and terms riddled with control with the need [for Clark] to abide by rules, regulations and directions.”

A former inspector for the Revenue, Cottrell is not alone in noticing the sheer weight of evidence against Mr Clark’s attempt to demonstrate an outside IR35 position.

In fact, at 126 of the judgment, the tribunal sounded particularly dismissive of his appeal, saying the presenter abjectly failed the in-business test, observes Ms Seeley Harris.

“Mr Clark was not [only told he was not] in business on his own account [despite using his own equipment and studio to carry out research and correct any defective work, but also…]

 “That absolutely no factors existed which were inconsistent with the contract being one of service,” the founder of ReLegal Consulting said, citing 133.

'Caution to contractors'

The lawyer further advised that the judgement records that LPPL and Sky had not intended the contracts to be the “exclusive record of the terms of their agreement.”

“The contract served as a framework agreement as there was a tacit understanding that the contracts did not provide for the practical aspects of the outworking of the contractual terms.

“That,” continued Ms Seeley Harris, “is what an Assignment Schedule is for. However, this is a caution [to contractors] to make sure that the contract does represent the true picture.”

'Atypical'

But the case’s IR35 lessons for other PSCs to learn might end there, according to Mr Maley.

“A high-profile victory for HMRC [like this] may concern contractors and businesses, but the fact of the matter is that Clark’s working relationship with Sky - like many other presenters - was quite different to ones held by typical contractors,” he says.

“[So] this result shouldn’t dissuade businesses from engaging contractors, the vast majority of whom - in our experience - are truly self-employed.”

'Engagers who wants employer control with none of the liabilities'

Also with an eye on how the case relates to now in-force IR35 reform is ReLegal Consulting.

The firm said: “Yet again we have a situation where a self-employed individual [Mr Clark] was required to incorporate at the behest of the client -- in this case Sky TV Limited. 

“Since April 2021, it would be Sky that would have picked up the tax bill for approximately £280k. But, as it stands under IR35, it is the TV presenter Dave Clark who has to pay.”

Bauer & Cottrell echoed: “Hopefully, we will soon see an end to these types of cases where the engager wants all of the controls of an employer, with none of the liabilities and risks. 

“Ironically, this case shows that at least something good has come from the new IR35/ Off-payroll rules, as the liable party would be the engager. Too late for poor Mr Clark though.”