Dave Clark, who stepped down from his role as a presenter of Sky Sports’ darts coverage in July last year, is facing a £281,000 IR35 bill after losing his appeal.
The First Tier Tribunal ruled that the contracts held between Clark’s limited company, Little Piece of Paradise Limited, and Sky from 2013 to 2018, were inside the scope of IR35. As a result, Clark will be expected to repay HMRC missing income tax and national insurance contributions for the period in question.
Tribunal judge Heidi Poon said the broadcaster should have been a Sky employee and paid directly instead of pay being passed through his limited company.
The tribunal found that the relationship between the presenter and Sky could be classed as a contract of service, largely due to the existence of mutuality of obligation.
Clark received £150,000 per year in return for covering darts events as and when required. This fee was split into 12 monthly payments, which remained the same irrespective of whether the presenter worked overtime or less than what was contractually agreed.
Responding to the judgement, Matt Fryer, head of legal services at Brookson Legal, said that Clarke is another victim of HMRC’s efforts to target freelance broadcasters who it believes are not IR35 compliant.
This ruling, Fryer explained, was also based on the level of control Sky had over the days Clark worked, the events covered (including the dates and locations) as well as how the services were delivered, which was “subject to the direction of Sky’s production team.”
“Whilst it was accepted by the tribunal that Mr Clark autonomously prepared for events, carried this out in his own time and in his own studio, […] this autonomy was controlled by regulatory guidelines, Sky guidelines and Sky production team direction”, he said.
“The tribunal concluded that the control over what services Mr Clark provided (or in the case of the restrictions, NDA, non-solicitation and non-compete provisions, control over what services Mr Clark could not provide) outweighed the control over how.
“This demonstrates that even where a client is paying for a person’s expertise and knowledge it does not mean they are not controlled by the client.”
Seb Maley, CEO at Qdos, said that while concerning, victory for the taxman mustn’t deter businesses from engaging contractors.
He said: “A high profile victory for HMRC may concern contractors and businesses, but the fact of the matter is that Clark’s working relationship with Sky – like many other presenters – was quite different to ones held by typical contractors. It’s also possible that Clark may appeal the case again and overturn this decision.
“This result shouldn’t dissuade businesses from engaging contractors, the vast majority of whom – in our experience – are truly self-employed. For example, 87 per cent of more than 30,000 contractors we have rigorously assessed on behalf of businesses belong, in our expert opinion, outside IR35.”