Supreme Court decides PGMOL case after 15 months of deliberation
By Justine Riccomini, Head of Tax (Employment and Devolved Taxes)
29 October 2024
Understand what happened in the employment status case decision issued by the Supreme Court in the case of Professional Game Match Officials Ltd (PGMOL).
The Supreme Court issued its decision on HMRC v Professional Game Match Officials Ltd (Appellant) [2024] UKSC 29 on 16 September 2024 – 15 months after the case was heard. It could be that the Supreme Court was snowed under with decision-making duties, but I prefer to believe that the delay (normally it takes up to nine months to issue a decision) was down to the judiciary really taking care to give the best decision they could in the circumstances.
There have been so many employment status case decisions over the past 20-plus years and employment tax advisers were keen for the Supreme Court to set a precedent which ultimately sets down how employers and advisers should structure their approach to employment status decision-making – in the hope that less time is spent deciding it in the courtroom.
What was this case about?
Around 60 match officials who are technically classified as amateurs due to refereeing being a secondary “hobby” role for the majority of them, contracted with PGMO Ltd. to supply their personal services and agree to abide by set standards of officiating the English Football League’s Tier 1 and 2 matches, as well as the Champions League and FA Cup. The officials would agree to work on a particular match in return for a fee, expenses and performance-related bonuses and could, if necessary, pull out in certain circumstances.
After conducting a review, HMRC assessed two tax years (2014/15 and 2015/16) and computed PAYE and NICs liabilities in relation to the officials who they concluded were employees working under an overarching contract of employment. A computation was presented to PGMOL, who appealed, arguing that each of the agreements were discrete, standalone contracts between an engager and a self-employed individual.
The following sequence of court appearances ensued:
| First Tier Tribunal | FTT found that insufficient mutuality of obligations and control existed. | Found in favour of PGMOL. HMRC appealed. |
|---|---|---|
| Upper Tribunal | UT held FTT had erred on the control point but concluded insufficient mutuality existed | Dismissed HMRC’s appeal HMRC appealed. |
| Court of Appeal | CA agreed appeal could be heard – on the basis of the mutuality point. | Case remitted back to FTT to reconsider both aspects of its decision (control and MOO). PGMOL appealed to SC on both issues applying to discrete contracts. |
| Supreme Court | SC decided to make recommendations to the FTT and remitted it back there for a decision to be remade. | SC found in favour of HMRC on the first two aspects of the Ready Mixed Concrete case tests but remitted the case back to FTT for it to decide on the third. |
What was the Supreme Court asked to do?
The Supreme Court was asked to review the decisions made by the courts in earlier hearings. The Supreme Court made its decision covering the first two tests of the Ready Mixed Concrete decision and then remitted it back to the First Tier Tribunal (FTT) to re-make its decision in relation to the third test of that case, having set out a series of recommendations that it wishes the FTT to consider.
The final decision – to determine whether a contract of employment exists based on the third aspect of the Ready Mixed Concrete tests – is therefore now in the hands of the First Tier Tribunal (FTT).
What did the Supreme Court decide?
The Supreme Court did not make a final decision on this case – which many tax professionals were expecting them to do. The Supreme Court held that the so-called “irreducible minimum” requirements of mutuality of obligation and control deemed necessary to establish a contract of employment between the officials and PGMOL existed – crucially, in relation to each contract, on a match-by-match basis.
The Supreme Court quashed the Court of Appeal’s decision in relation to mutuality of obligations, opining that mutuality can in fact apply to each discrete contract – thus concluding it was unnecessary to examine any overarching contracts between the parties.
Having established that parts 1 and 2 of the Ready Mixed Concrete tests were fulfilled, the Supreme Court sent the third test back to the FTT to decide whether the individual contracts were in fact contracts of employment.
Crucially, the Supreme Court included an opinion that when considering employment status, that consideration needs to take into account all of the fact pattern and not just part of it. Mutuality alone is not a sufficient test to prove employment, nor is control.
So – what happens now?
Once again, we find ourselves waiting for the FTT to conclude its deliberations in relation to this case. In the meantime, now is the time for a long overdue review of employment status and we are hoping that the new government will use the opportunity to undertake a root and branch review of employment status, because the unacceptable levels of complexity are currently proving to be a barrier to business, the wider economy and labour market forces.
If you’ve spotted a tax anomaly that is producing an inequitable result or getting in the way of doing business, why not share it with us at tax@icas.com.
