A former Sky Sports presenter has been ordered to pay more than £280,000 in tax after losing a case at the First Tier Tribunal (FTT).
The judge found that Dave Clark was effectively working as an employee of Sky, meaning he fell inside IR35 rules.
Also known as the off-payroll working rules, IR35 legislation may apply if a worker or contractor provides their services through their own limited company or another type of intermediary to the client, such as a personal service company or a partnership.
The rules ensure that contractors – who would have been an employee if they were providing their services directly to the client – pay broadly the same income tax and national insurance contributions (NICs) as employees.
Mr Clark – who presented darts and boxing until his retirement in 2020 – was paid through his intermediary company, Little Piece of Paradise Limited (LPPL).
The tribunal heard that the company signed a new agreement with Sky every two years to provide ad hoc broadcasting services and was paid an annual fee of between £155,000 and £160,000.
The contracts stated that “the company shall provide the services of the personnel as a commentator, presenter, interviewer, guest, or other participant in the making of any editorial, programme or video whether in vision or audio and whether in a studio or on location, live or recorded during the assignment.”
His defence argued that the commentator was given “overall control” of his presenting duties, and “no element” of the Contract required LPPL to accept any work offered. In addition, Mr Clark was not treated as a staff member, did not possess any pass for entry in Sky Premises, and enjoyed no employment related benefits, such as sick and holiday pay.
But the FTT deemed that the contracts resembled an “inside IR35 contract” as the presenter was paid on a monthly basis regardless of whether he had work every month.
“In our view, while the performance of the Services by Mr Clark was intermittent, with breaks in work engagements being punctuated by periods of work, the irreducible minimum remained in force under the relevant Contract which served as an umbrella contract between the parties,” the tribunal stated.
“We find therefore that mutuality of obligation existed between Sky and Mr Clark for each contractual period. Since each contract was renewed on its expiry to provide a continuum for the six years in question, the state of affairs as regards mutuality of obligation obtained for the entire duration of the relevant period. We are not satisfied that the appellant has advanced any valid submissions, either on the law or on the facts, to displace our conclusion.”
He is therefore liable to pay income tax and NICs to the tune of £281,084.48, relating to tax liabilities accumulated from 2012 to 2018.
IR35 rules have tightened in recent years. From 06 April 2017, public authorities became responsible for deciding if the legislation applied where they contracted workers who provide services through their own intermediary. This was extended to medium and large-sized clients outside the public sector on 06 April 2021.
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