Football referees held not to be employed for tax purposes – the final whistle for HMRC?

14 May 2020. Published by Ben Roberts, Partner

Whether an individual is employed, or self-employed, for tax purposes is a question that has – in the era of the 'gig' economy and given the anticipated extension of the off-payroll working (IR35) rules – never required closer examination.

This blog considers the recent Upper Tribunal (UT) decision in Professional Game Match Officials Limited v HMRC [2020] UKUT 147 (TCC), a decision that brought together (to my personal delight) football and tax.

The UT dismissed HMRC's appeal against a 2018 decision of the First-tier Tribunal (FTT) that certain football referees and other match day officials were not employees of Professional Game Match Officials Limited (PGMOL). Accordingly, PGMOL did not have tax and national insurance contributions liabilities in respect of the officials in question.

The football season may be paused (or, in some cases, already declared 'null and void') but this decision has given us a little bit of a tax-related football fix. The decision helpfully summarises the case law on mutuality of obligation although, as this decision amply demonstrates, whether an individual is, or is not, an employee for tax purposes remains a highly fact-dependant question. The case law derived principles discussed by the UT are central to the extension of the new IR35 rules to the private sector, something else that has been 'paused' by the COVID-19 pandemic[1].


PGMOL is a joint venture run on a "not-for-profit" basis, with three 'members' being the Football Association, the Premier League and the English Football League. PGMOL's role is to provide referees and other officials for matches in the most significant national football competitions. It also organises courses, conferences and training for these officials.

The appeals in question related only to payments (ie match fees and expenses) made by PGMOL to individuals in the so-called "National Group" of elite officials. This is, effectively, the group of elite football officials just below the group who routinely officiate Premier League matches[2].

This National Group of referees and other officials primarily refereed matches in the second, third and fourth tiers of English football, as well as FA Cup matches and (in capacity as 'fourth' officials) in the Premier League.

PGMOL's principal argument was that no contractual relationship existed between PGMOL and the National Group referees. These referees are, before the season starts, sent a number of documents (some requiring signature) which include a "Code of Practice", set of "Guidelines" and "Match Day Procedures". However, according to PGMOL none of these in isolation nor taken together amounted to a "contract" between employee and employer. PGMOL's position was that for these National Group officials, match officiating was a hobby (albeit a very serious one). They managed their match officiating around other paid work (which "paid the bills"). These individuals are hugely ambitious and committed, and love the role. They therefore, largely, adhered to PGMOL's requests on a voluntary basis.

HMRC, in contrast, argued that taking into account the written documents in their entirety and the wider factual matrix, there were express annual contracts between PGMOL and the referees. It was HMRC's position that each individual engagement to officiate at a particular match was a contract of employment, existing in the context of an overarching or umbrella contract.

FTT decision

PGMOL's appeal against HMRC determinations for income tax and class 1 NICs was allowed by the FTT. Although the FTT concluded that the National Group referees did each have a contractual relationship with PGMOL (both in the form of individual engagements for specific matches and also a seasonal 'overarching' contract), on the key question the FTT disagreed with HMRC and held that these contractual arrangements did not give rise to a contract of service.

Applying the established multi-factorial test for employment status, the FTT held (amongst other things) that:

  • the documents contained no legal obligation to provide work or to accept work offered. The FTT noted that "this is not an ordinary situation" as PGMOL is dealing with highly-motivated individuals, who generally wished to make themselves available for such high-profile matches as regularly as possible. There was therefore no need to impose a legal obligation to accept work.
  • there was no sanction if a National Group official could not attend an 'accepted' match for any reason. Rather than being a breach of the contract that the FTT had identified, the official would simply not be paid (and PGMOL would find a replacement).
  • on match day, the referee was undoubtedly in charge; his decisions are final and the FTT was not able to ascribe to PGMOL a sufficient degree of control over the officials to satisfy the test for employment status.
  • the other relevant factors did not otherwise point to a relationship of employment between PGMOL and the officials.

UT decision

On 6 May 2020, the UT dismissed HMRC's appeal against the FTT decision concluding that the FTT had not erred in law in its decision that these referees were engaged under contracts for services. Specifically, the UT held that the FTT had not erred in law in concluding that that there was, on these facts which included the lack of a sanction if an official did not attend a match, insufficient mutuality of obligation (which has been descried as the "irreducible minimum" for a contract of employment).

For more information on the RPC tax team please click here, and on the RPC Sports group please click here.

[1] The extension of these rules is now planned to take place from April 2021.

[2] The Premier League officials are employed by PGMOL under full-time written contracts of employment.

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