Case summary: PGMOL v HMRC 2018

    PGMOL v HMRC 2018 is the latest self-employed status case to be heard at the tax tribunals which found in favour of the taxpayer in respect of self-employed referees.

    This case demonstrates that the core fundamentals of status remain the same, and is a stark reminder to anyone dealing with status and IR35 disputes not to be dissuaded by HMRC on these fundamentals. This case will be a valuable addition to our armoury in any HMRC attack of status.

    Alex Lancett of Accountax provides a detailed summary of this case.

    The latest tribunal case finds referees are self-employed in the judgement of Professional Game Match Officials Limited (“PGMOL”) v HMRC 2018.
    HMRC deemed the referees as being employed by PGMOL and raised tax and NI assessments for the 2014/15 and 2015/16 tax years for tax and NI liabilities totalling £583,874.07. PGMOL appealed to the tribunal in contention of HMRC’s assessment. 

    PGMOL specialise in providing referees and match officials to the FA Cup, Premier League, Championship League and Leagues 1 and 2 (EFL). The referees are ranked at different levels ranging from Level 1 (“National List”) and Level 9 (“Trainee Referee”). PGMOL also employ a small number of full-time referees (“Select Group”) under contracts of employment. This appeal predominantly relates to those at Level 1.

    Laws of the Game are administered by the FA and are binding on referees and match officials. They cover impartiality during match games and explicitly state that the referee's decision is final. 

    In the absence of a written contract between PGMOL and the referees and match officials, the tribunal had to consider whether documents such as the code of practice, code of conduct and correspondence constituted an implicit contract of employment or a contract for services. 

    As a consequence of failing to comply with the code of conduct, employees would be dismissed and self-employed individuals would be removed from the list. Additionally, in order to remain at the highest level, the referees must participate in an annual fitness test and failure to do so would result in being reclassified. 

    When considering the fundamental factors in this case, the focus was on mutuality of obligations and control with little mention of personal service. The simple facts were, the referees had no right of substitution, further supported by the fact PGMOL were responsible for arranging cover in the event a referee was unable or unwilling to provide the services.

    In terms of mutuality, PGMOL argued there were no mutual obligations between the parties as refereeing was motivated by their desire to remain at the highest level, often executed alongside full-time employment; refereeing was merely a pastime and so naturally the referees were likely to choose to accept requests for services. 

    On the contrary, HMRC argued on-going mutual obligations existed where there was an implicit guarantee of work each week and, in practice, this was the case. This was established due to being offered regular engagements over a period of time. The code of practice addresses “expectations” of being readily available, where HMRC dispute that this was a mere expectation, rather, it was more of an obligation as there would be consequential classifications for unavailability. Moreover, the prerequisite of a referee or match official for a football game is fundamental for the match to go ahead. HMRC contended the responsibility on PGMOL to provide a referee for matches created obligations between matches. 

    The tribunal disagreed with HMRC. Irrefutably, there were some obligations imposed on the engagement due to the fact the referees were to officiate as anticipated and PGMOL to pay for the work completed. Nevertheless, there were no restrictions or sanctions, even after a match had been accepted. The only sanction on part of the referees would be lack of payment in respect of no work being completed. In addition, PGMOL was also able to remove/replace referees with no consequence.

    In relation to control, PGMOL argued the referees were required to abide by fitness milestones simply for having the necessary qualifications for the work and there was no obligation to attend the training sessions. The control that was exercised was merely by regulation rather than direction or supervision. The decision of the referee during a game was final and referees had no input from PGMOL on reaching that decision. 

    The tribunal agreed that there were some elements of control enforced by the Code of Conduct, Match Day Procedures and the fitness regime. However, this did not mean that ultimately, the right of control rested with PGMOL. The assessment system and coaching system were advisory rather than controlling. The coaches could advise the referees on ways to develop but they could not enforce that advice on them. It was up to the referees to either take the advice on board or ignore it. 

    The tribunal disagreed that PGMOL had control over where they were sent for matches. The referees and match officials had discretion over their geographical preference and availability on match days and could refuse a particular match if it did not suit them. The requirement for travelling to the location was due solely to the nature of the work. 

    Furthermore, PGMOL could not control “how” the referees performed the work. The Laws of the Game specifically state the referee's decision is final. Even if they believed a referee to be particularly poor during a match, they could not remove and replace them once a game had started, rather, they could only offer coaching advice.

    In support of HMRC’s side of the argument, there was no element of financial risk, referees had an “employee” benefit of health insurance, they worked exclusively for PGMOL and they were “part and parcel” of the organisation. 

    Overall, the tribunal concluded an existence of mutuality of obligations and control in the individual engagements was missing, ruling the referees were self-employed. It has been 51 years since the case of Ready Mixed Concrete (South East) v Minister of Pensions and National Insurance (1968) that found drivers of ready mixed concrete self-employed due in part to the fact they were not told “how” to drive. Similarly, in this case, the referees were not told “how” to referee; they were simply advised rather than controlled. This case reveals another blow for HMRC and emphasises the fact they need to reassess their arguments in terms of “what”, “where” and “when” may just not be strong enough going forwards. 

    This is a stark reminder to anyone with a status or IR35 dispute with HMRC; the main overriding principles remain the same, do not be dissuaded by HMRC from your arguments on those points. 

    If you would like any more information on self-employed status or need any help in your HMRC dispute please contact us at or call 0345 066 0035.