19 November 2021 Julia Ascott, Employment Taxes Specialist
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:
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.