As a Liverpool fan, I can’t pretend I’m not relieved the season is over.
And, as a football fan, I can’t pretend I’m not relieved to have a few months when I don’t need to postpone celebrating a goal while VAR takes a few minutes trying to find a reason to disallow it.
Well, this month we’ve had another long-running review involving referees.
Only this one wasn’t at Stockley Park.
It was between HMRC and PGMOL – the organisation responsible for professional football referees – and it was about whether some referees should be treated as employees for tax purposes, or whether they were genuinely self-employed.
And after nearly a decade of arguments, appeals, legal rulings and what feels like several trips to the pitchside monitor, the First-tier Tribunal decided the individual match engagements were contracts for services, not employment contracts.
In plain English, the referees won.
Now, “employment status case involving football referees” might not sound like the most exciting thing you’ll read this week.
But it matters if you use freelancers, subcontractors, consultants or casual workers.
Because the big lesson is this – just because somebody looks a bit like an employee doesn’t automatically mean they are one.
And just because a contract says somebody is self-employed doesn’t automatically mean they are either.
HMRC’s argument was helped by the fact that there was some mutuality and control. In normal human language, that means the referee agreed to do the match, PGMOL agreed to pay them, and PGMOL had some rules and systems in place.
That sounds quite employee-ish.
But the tribunal then looked at the wider picture. The referees could turn down appointments, mark themselves as unavailable and, in some cases, even pull out after accepting a match without penalty. Many had other jobs. Refereeing was serious, but it wasn’t generally their main livelihood.
That wider picture mattered.
And it matters in your business too.
If HMRC decides someone should have been treated as an employee, the problem usually isn’t just “please do it differently next time”.
The problem is that HMRC may say, “You should have operated PAYE on those payments all along.”
That could mean the business is on the hook for:
- PAYE tax that should have been deducted
- employee National Insurance
- employer National Insurance
- interest and penalties
- professional fees for dealing with the enquiry
- potentially wider employment issues too, depending on the facts
And it may not just affect one person.
If you’ve used the same setup for several freelancers, subcontractors or consultants over a few years, HMRC could look at the whole pattern.
A rough example
If you’ve paid someone £50,000 a year as self-employed for three years, HMRC may not just be interested in the next invoice. They may look back at the £150,000 already paid and ask what tax and National Insurance should have gone through payroll.
That’s why this isn’t just a paperwork point – it’s a cashflow risk.
So, if you use self-employed people in your business, don’t just assume it’s fine because “we’ve always done it that way”.
Take ten minutes this week and write down everyone you pay who isn’t on payroll, then ask:
- Are they genuinely independent?
- Can they turn work down?
- Do they work for other people?
- Would the paperwork match what happens in real life?
- Would I feel comfortable explaining the arrangement to HMRC?
If the answer to that last one is “not really”, it’s worth checking before HMRC asks the question first.
Because if HMRC reviews the footage later, you don’t want them deciding the original call was wrong.
If you’re using freelancers, subcontractors or consultants and you’re not sure whether the arrangements are watertight, hit reply and we can take a look.
Cheers
Jon