The Upper Tribunal (UT) overturned a previous First-Tier Tribunal decision made in June 2019 when Hawksbee successfully challenged his deemed status and a tax bill of around £140k. HMRC had originally challenged an engagement between his limited company Kickabout Productions Ltd and radio station Talksport between 2012 and 2015.

Yesterday’s decision means that the UT agrees with HMRC that Hawksbee should have been classed as an employee during the tax year 2012/13 and 2014/15, and makes it likely that he will have to repay the reported £140k in tax liabilities.

In a complex case involving many factors, but particularly the issue of mutuality of obligation (MOO), Judge Mr Justice Zacaroli decided that Talksport had no obligation to provide Hawksbee with work under the two hypothetical contracts in question. “Taking all of the relevant factors into account, we consider that viewed as a whole they are not inconsistent with the hypothetical contracts being contracts of employment,” he concluded.

Commenting on the decision of the UT, Dave Chaplin, CEO of ContractorCalculator, said the repercussions for traditional contractors were as yet unclear. “This is a surprising and unexpected ruling. Some careful analysis will be required before drawing any firm conclusions on how it will impact IR35 and off-payroll for more traditional-based contractors.

“The case law on presenter cases is still settling down through the courts, and the decisions being made can appear to contradict each other. All of the cases have their own unique nuances, and a common theme is badly drafted contracts that don’t reflect the reality of the situation.”

Seb Maley, CEO of Qdos Contractor, said: “This is a rare win for HMRC, but one that shines a light on the needless complexity of the IR35 legislation, which can easily be misinterpreted and misapplied. It also shows the significant sums that are very often at stake in these tax cases.

“The fact that this case was by no means clear cut also goes to show how important it is that IR35 status is set with care, and after careful consideration of the written contract and a review of the working practices. Contractors, along with hiring organisations and recruitment agencies, need to be acutely aware of this when deciding if the service provided reflects self-employment or employment.

“As concerning as this result is, it’s worth pointing out that Mr Hawksbee’s engagement – like many other presenters who have faced an IR35 investigation – is quite different from a typical contractor's. In our experience, the vast majority of contractors are genuine and belong outside IR35.”

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