Result lands presenter with a backdated tax bill totalling £700,000 in income tax and national insurance liabilites
Stuart Barnes, a former rugby player turned pundit, has lost the latest case in his long-running IR35 saga, and now faces a tax bill worth a reported £700,000.
Barnes – widely known as “the voice of rugby” for his media work – was found to have been operating as a disguised employee of Sky, throughout contracts held with the broadcaster between the 2013/14 and 2018/19 tax years.
Previously, Barnes had successfully contested his case at the First Tier Tribunal, with the last ruling issued in January 2023. However, HMRC appealed against that decision – bringing the case to an Upper Tier Tribunal in April this year, with the latest ruling reached on 28th August.
Case history and key arguments
Barnes won the first contest at the First Tier Tribunal (FTT) because the judges believed he had operated in a genuinely self-employed capacity in the contracts held with Sky.
He had a number of other clients, with around 40% of his income arising from other engagements. The level of autonomy Barnes held in his engagement with Sky – in other words, the lack of control exercised over him – was another “compelling indicator” of being in business “on his own account”.
However, HMRC appealed against this ruling on two grounds: that the First Tier Tribunal had “erred in its construction of the hypothetical contract” between Sky and Barnes, and that it had erred in its “interpretation and/or application” of employment status tests.
The Upper Tier Tribunal (UTT) considered both these grounds. The first was dismissed, but the judges found in HMRC’s favour on the second. They concluded, “with regret”, that the FTT had incorrectly applied the hypothetical contract.
As a result, the UTT set aside the previous decision and remade it, finding in HMRC’s favour for reasons which included “the long duration of the contract, the absence of a right of substitution… the absence of financial risk and the overall length of the relationship with Sky”.
These factors “collectively outweigh… the fact he was in business on his account outside his relationship with Sky”, leading the UTT to conclude: “the relationship [with Sky] would have been one of employment”.
“Boilerplate contracts” to blame
Dave Chaplin – CEO of IR35 Shield – attended both days of the latest hearing, and offered his analysis of the case and its importance for the wider contracting industry.
“The primary lesson is that you are still trying to defend a Sky TV case based on the boilerplate contract everyone else had, and Sky isn’t going to show up as a witness at FTT, then give up and settle – your prospects of success are dire”, Chaplin said.
“The Sky boilerplate contracts used by all these individuals contained considerable onerous provisions, particularly around control, which did not necessarily reflect the level of control exercised in reality.
“As we’ve seen repeatedly in IR35 cases, contractual provisions are central when determining employment status for tax purposes”.
Ultimately, Chaplin said, the Barnes case “underscores the need for freelancers and their clients to ensure that their contracts and working practices accurately reflect the true nature of their relationship.”
He concluded by emphasising “the importance of clear, well-drafted contracts and consistent working practices that align with the intended status of the engagement”.
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