Latest IR35 ruling will affect all self-employed professionals

The Supreme Court’s long-awaited verdict on its latest IR35 case could have a negative effect on the self-employed sector.

In particular with how difficult it will be for professionals to prove that they are legally self-employed.

This is according to the IPSE, which as a result has called on the government to update the rules surrounding employment status.

The case, HMRC v PGMOL (Professional Game Match Officials Limited) – the company that provides referees to league football matches and FA Cup fixtures, looked at whether the referees, who were contracted by PGMOL on a self-employed basis, should have been paid and taxed as employees.

Commenting on the case, Andy Chamberlain, IPSE’s Policy Director, said, “This ruling makes it even harder to be self-employed in the UK. The Supreme Court has effectively blocked one of the avenues for freelancers to prove that they are legitimately working for themselves.

“HMRC argued that merely by agreeing to do some work for another party, the referees and PGMOL had established ‘mutual obligations’, which is a key indicator of employment. The Supreme Court backed this argument, meaning it will now be much harder to prove that there are not mutual obligations in any work arrangement.

“However, mutuality of obligation isn’t the only factor that must be considered. There is likely now to be more focus on how much control the freelancer has over the work they’re doing.

“We shouldn’t lose sight of the fact that these referees had other jobs and officiated matches in their spare time. They were not employed and did not receive benefits like holiday pay and pension contributions.

“Having a vibrant self-employed sector is great for the economy and for those who choose to work independently. We are pressing the government to take a fresh look at our employment status rules to ensure that they are simpler and fairer for everyone.”

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