Professional Game Match Officials Ltd
| Jurisdiction | UK Non-devolved |
| Judgment Date | 30 August 2018 |
| Neutral Citation | [2018] UKFTT 528 (TC) |
| Date | 30 August 2018 |
| Court | First Tier Tribunal (Tax Chamber) |
[2018] UKFTT 0528 (TC)
Judge Sarah Falk, Janet Wilkins
Jolyon Maugham QC and Georgia Hicks, instructed by Deloitte LLP, appeared for the appellant
Akash Nawbatt QC and Sebastian Purnell, instructed by the General Counsel and Solicitor to HM Revenue and Customs, appeared for the respondents
PAYE and NIC – Income Tax (Pay as You Earn) Regulations 2003 (SI 2003/2682), reg. 80 determinations and Social Security (Transfer of Functions) Act 1999, s. 8 decisions – Whether Level 1 National Group football referees have contracts with PGMOL – Yes – Whether they are employees of PGMOL – No – Whether payments made on behalf of and at expense of PGMOL within ITEPA 2003, s. 687 – Yes.
The First-Tier Tribunal (FTT) found that football game officials were not employees but payments made on behalf and at expense of PGMOL were within ITEPA 2003, s. 687.
This appeal related to determinations issued under of the Income Tax (Pay as You Earn) Regulations 2003 (SI 2003/2682), reg. 80 (“regulation 80 determinations”) in respect of income tax deductible under the Pay As You Earn (“PAYE”) system, and decisions issued under s. 8 of the Social Security (Transfer of Functions) Act 1999 (“section 8 decisions”) in respect of Class 1 National Insurance Contributions (“NICs”), in relation to the tax years 2014–15 and 2015–16. The determinations and decisions were issued on the basis that the appellant, Professional Game Match Officials Limited (“PGMOL”), was the employer of certain football referees during three football seasons falling partly or wholly in those tax years, namely the 2013–14, 2014–15 and 2015–16 seasons. The amounts directly at stake in the appeal were income tax of £172,849.18 and NICs of £123,990.30 in respect of the tax year 2014–15, and income tax of £162,661.84 and NICs of £124,372.75 in respect of the tax year 2015–16, a total of £583,874.07 excluding interest. The principal issue in the appeal was whether the referees were in employment relationships with PGMOL. In seeking to establish that they were not, PGMOL's case was not simply that the referees were self-employed, but also that there was in fact no contract between it and the referees at all. In addition, it has raised an issue as to whether, even if an employment relationship was established with PGMOL, the determinations and decisions were incorrectly issued because (in essence) it did not make the relevant payments.
PGMOL was a company limited by guarantee whose three members are The Football Association Limited (the “FA”), The Football Association Premier League Limited (“the Premier League”) and The Football League Limited (“the Football League”), referred to as the English Football League (“the EFL”). PGMOL was funded by its members on an annual basis and was intended to be run on a “not for profit basis”, with any annual surplus being retained as a reserve to cover unexpected costs or deficits in other years. PGMOL's role related to the provision of referees and other match officials for matches in the most significant national football competitions, in particular the Premier League (the top 20 clubs), the FA Cup, and the EFL, which comprises 72 clubs in the Championship League and Leagues 1 and 2.
The FA was the governing body for English football, including all referees in England. The FA classified referees by reference to a number of different levels, ranging from International, then Level 1 (the National List) to Level 9 (trainee referees). There were over 30,000 referees in total, the vast majority at the lower levels. PGMOL's role related primarily to referees at Level 1 and their appointments to matches, although it had some role in relation to training and fitness for referees at the next level down, Level 2. The FA had the role of making match appointments for referees at Levels 2 to 4 (broadly corresponding to semi-professional football), and below that referees were appointed to matches by the County FAs and Leagues. PGMOL employed a number of referees under full-time written employment contracts. These were referred to as the “Select Group” referees, who at the relevant time primarily refereed Premier League matches. Some of these individuals were also qualified to referee internationally. The referees to which this appeal related were, like the Select Group, Level 1 referees in FA terms, but undertook refereeing in their spare time, typically alongside other full-time employment. During the 2014–15 season there were 60 referees in this category. Although there was some variation in terminology the FTT referred to this group as the “National Group” referees. The appeal related to payments to these individuals, mainly in respect of match fees and expenses. At the relevant time National Group referees primarily refereed matches in Leagues 1 and 2, but also in the Championship League and FA Cup. They also acted as “Fourth Official” in some matches, including in the Premier League. Occasionally National Group referees might also referee matches in the Premier League, but this was exceptional and related to a few referees being considered for the Select Group. Whilst secondary to the Premier League, the Championship League was still a very significant competition in terms of viewing figures, both in terms of attendance at matches and on TV. Promotion from the Championship League to the Premier League (or indeed relegation) also has material financial implications for clubs. The role of a referee at this level was clearly a significant one.
The FTT summarised the legal background including reference to a number of well-known employment v self-employment cases. After hearing evidence from a number of PGMOL officers the FTT made significant findings of fact running to 20 pages (see case report for actual details).
Mr Maugham's principal submission (for PGMOL) was that there was no contractual relationship between PGMOL and the National Group referees, PGMOL instead simply managing the interactions between them and the competitions. There was no written or oral contract between PGMOL and the referees and the test for implying one was necessity. The Code of Practice was not written in contractual language, the fitness requirements were preconditions to appearing or remaining on the National List (that was, a qualification for the work) and reflected FA rules, and the training programme was not mandatory. The Match Day Procedures also simply reflected FA and competition requirements. The controls on National Group referees were imposed by the Laws of the Game (which it was the referees' job description to apply), the Referee Regulations and the competition rules, and not by PGMOL. PGMOL just communicated FA and competition requirements in a digestible form. The referees also wanted to referee at the highest level and so typically wished to adhere to PGMOL's requests on a voluntary basis. They were driven by their passion for refereeing and would not act any differently if a contract was in place. The only sanction available to PGMOL was not to invite referees to officiate in future matches.
PGMOL's role was to provide a service to the FA and the competitions of managing the supply and administration of referees, with the FA and competitions delegating refereeing-related functions to PGMOL to ensure that their requirements for high quality referees were met. It was simply a joint venture between the three members and had no meaningful independent life or public presence. Additionally any contracts between the referees and PGMOL were not contracts of employment. They lacked the essential features of mutuality of obligations and control, and other features also pointed away from employment.
Other features also pointed away from employment, such as being in charge of their own fitness, taking responsibility for pre-match preparation, the provision of some kit, and the opportunity to profit from sponsorship, media interactions and officiating in more matches. Refereeing for National Group referees was a passion or hobby and their commitment to it was not an incident of employment but instead of their enjoyment and desire to develop.
Mr Nawbatt (for HMRC) submitted that there were express annual contracts between PGMOL and the referees, with an expectation of renewal (subject to a review). Because there was no single document fully recording the terms, the Tribunal had to consider the written documents and the wider factual matrix, including the parties' subsequent conduct, to ascertain the terms. In this case some of the terms were contained in the Code of Practice, Match Day Procedures and Fitness Protocol but other terms needed to be inferred from the wider factual matrix, including the parties' conduct. HMRC's case was that individual engagements to officiate at matches were contracts of employment, and that these existed in the context of an overarching or umbrella contract between PGMOL and the referee.
Mr Nawbatt submitted that the expectation of being offered work, resulting from the practice over a period of time, could constitute a legal obligation to provide some work or perform work provided, Mr Nawbatt also submitted that there was a sufficient degree of control. The practical realities of the relevant industry had to be taken into account, and all that was needed was a sufficient framework of control. The level of control exercised during matches was the same as for the Select Group, who were accepted as being employed. There was continual monitoring and assessment via the assessor and coaching system, and assessments fed into remuneration. The assessment system was no different to regular employee appraisals.
The FTT concluded that National Group referees did have contractual relationships with PGMOL during the periods in dispute. In their view there was a wealth of evidence to support this conclusion, and very little evidence to support PGMOL's contention that the referees instead entered...
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Christa Ackroyd Media Ltd v Revenue and Customs Commissioners
...breach was not a right of control over the services, but a right to bring them to an end: see Professional Game Match Officials Ltd [2018] TC 06698. [57] We are aware that the decision in Professional Game Match Officials is listed for appeal. In view of our decision as to the meaning of “f......