By Helen Pearson at Brabners
A long-running dispute over the tax status of football referees has taken another turn, with the First-tier Tax Tribunal (FTT) concluding that match fees paid by Professional Game Match Officials Ltd (PGMOL) were not employment earnings for tax or National Insurance purposes.
While the case arises in a sporting context, it provides a useful reminder for businesses across the labour supply chain, including umbrella companies and agencies, of the importance of correctly assessing employment status.
Background
PGMOL engages referees in the National Group to officiate matches for the EFL (English Football League) and the FA Cup, with those referees providing their services on a self-employed basis.
Each match is covered by a separate contract between PGMOL and the referee. Once a referee accepts an appointment, they submit a match report afterwards and receive a match fee in return. Referees can refuse an assignment or cancel an agreed commitment without sanction, although in practice they’re required to give a reason.
The legal framework
In 2024, the Supreme Court held that the two employment tests of ‘mutuality of obligation’ and ‘control’ were met, and remitted the case back to the FTT to reconsider the third and final stage of the test from the case of Ready Mixed Concrete [1968] 2 QB 497 (RMC). The final stage is a holistic assessment that looks broadly at all the relevant terms and circumstances to determine the true nature of the relationship. This meant that the FTT had to decide whether the match fees were employment earnings in light of all the relevant factors and surrounding circumstances in the round.
The FTT’s decision
Ultimately, the FTT concluded that the individual match appointments weren’t ‘contracts of employment’ and therefore the match fees paid to the referees didn’t constitute employment earnings.
In making its decision, the FTT considered a range of factors, including:
- The mutual obligations for each contract are “narrow, episodic and contingent”.
- The regulator (not PGMOL) polices the performance of the referees and handles disciplinary action.
- The applicable obligations are set by the regulator and merely passed on by PGMOL.
- PGMOL exercised a “significant framework of control” but the nature of control was regulatory, facilitative and developmental, as opposed to more managerial and supervisory control.
- Referees were operationally involved with PGMOL but not integrated into its organisation as employees.
- Refereeing is typically a serious hobby with a “side income” that “did not pay the bills”.
- There was a general expectation, held by both PGMOL and the referees, that a number of appointments would be offered and accepted regularly throughout the season.
- The provision of equipment may not be indicative of employment.
While the FTT concluded that none of these factors were determinative in their own right, when taken together, the overall conclusion was that the referees didn’t satisfy the employment status tests in RMC.
The impact
Although the facts are specific to this case, the decision reinforces several key points which are highly relevant to the recruitment sector:
No single factor is determinative
Even where mutuality of obligation and control are present, this will not automatically result in employment status. A holistic assessment remains essential.
Structure and reality must align
Tribunals will look beyond contractual labels and consider the practical reality of the working arrangement.
Engagement-by-engagement models carry risk but can be effective
Arrangements based on discrete assignments may support a non-employment status finding, but only where the wider factual matrix supports that position.
HMRC scrutiny is likely to continue
The FTT’s decision may not be the last word on this case, and HMRC may yet appeal.
Key takeaways
Failure to properly assess employment status can result in significant tax exposure and prolonged disputes with HMRC, as well as potential claims in the Employment Tribunal. For umbrella companies and agencies, getting employment status right from the outset is critical to managing risk in an increasingly scrutinised regulatory environment.
We recommend:
- Undertaking robust employment status assessments for all engagement models;
- Ensuring that contractual terms reflect the reality of the arrangement;
- Keeping arrangements under ongoing review; and
- Maintaining clear documentation to support the rationale for status decisions.
