Rugby pundit wins ruck with HMRC

Published: 23rd January 2023

Stuart Barnes (B) provided his services through a company, S&L Barnes Limited (S). These services were provided to various media platforms, including newspapers, magazines and television broadcasters. HMRC considered these arrangements to be caught by the IR35 rules and issued a determination for almost £700,000 relating to a six year period. This was in relation to a commentary contract with Sky. The tribunal had to consider whether a “hypothetical contract” existed between B and Sky, i.e. considering all factors then in the absence of S, would B be an employee of Sky? Sky contracted S to provide B on up to 228 days, with no right of substitution (although B could suggest reasonable alternatives). B had a non-compete clause meaning that he would have required Sky’s permission to undertake any new commercial ventures. B also had a paid holiday entitlement under the contract, but was not paid for any other absences, e.g. sickness.

However, the judge found that the contractual terms did not wholly reflect the commercial reality of the arrangement. The 228 contracted days were a ceiling: Sky was not obligated to provide work on all of those days, and in fact B worked around 25% less than that with no adjustment to the fee payable. It was also clear that, outside of the contract with Sky, B was in business on his own account and was not financially dependent on Sky. He often reproduced the views given in his commentary work elsewhere, e.g. in The Sunday Times, and was not prevented from doing so. Considering all these factors together, the judge held that the contract was outside IR35. The appeal against the determination of nearly £700,000 was allowed on the basis that there was no hypothetical contract.

This case is a contrast to other cases involving presenters where the arrangements have been found to be inside IR35. The judge found that there was a genuine difference between the work of a presenter and the work of a commentator. It will certainly be interesting to see if HMRC looks for a rematch at the Upper Tribunal.

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