PD & MJ Limited v The Commissioners for HMRC

By way of summary, Mr Firth submitted as follows:

As set out above, Mr Firth’s submission in respect of the actual contract is effectively that Mr Thompson was only required to work (or, more correctly, the Company was only required to supply Mr Thompson) when mutually agreed between Mr Thompson and Sky. Mr Firth’s formulation for the purposes of the hypothetical contract was slightly different in that he said that Mr Thompson had a right to refuse a request to carry out an engagement (although, given that what appears to be suggested for the actual contract is an unfettered right to refuse to an engagement, this effectively amounts to the same thing). Mr Firth noted that this is how the relationship had worked since 2005.

Mr Firth also drew close parallels between the present case and Barnes. In Barnes, the First-tier Tribunal was considering the relationship between Sky and Mr StuartBarnes, who was (Mr Firth submitted) effectively a pundit for rugby in the same way that Mr Thompson was for football. The contracts in Barnes were substantially the same as the contracts in the present case. The First-tier Tribunal analysed the actual contracts and concluded that the hypothetical contract was broadly the same as the actual contracts. As regards the Ready Mixed Concrete three-stage test, the First-tier Tribunal held that there was mutuality of obligation and that there was a sufficient framework of control to satisfy the second stage of the test. As regards the third stage of the test, the First-tier Tribunal held that that the hypothetical contract would not have given rise to a contract of employment. This was, in particular, for the following reasons as set out at [134] to [137] (which we set out in full given the extent of Mr Firth’s reliance upon the case).

“[134] With these precepts in mind, the factors in the present case relevant to my consideration at the third stage of the RMC test are as follows.

(1)

There is a distinction between a presenter and a commentator in the broadcast of a live match. Mr Barnes started as a presenter with Sky, but moved to become a commentator. During the relevant period, the principal services provided by Mr Barnes to Sky as a co-commentator in live matches were punditry in nature, which I find to be qualitatively different from those provided by Miles Harrison as a presenter.

(2)

Mr Harrison was the ‘first voice’ and provided the running commentary of a match, while Mr Barnes was the ‘second voice’ giving the analytical insights on the good and bad moments of a game, from team strategy to the execution of moves by individual players. Mr Harrison would be on air most of the time, while Mr Barnes’ commentary would come in at the appropriate moments and would often be accompanied by coordinated replays.

(3)

Without Mr Barnes’ analytical input, the live commentary of a match with only the first voice would be all the duller, and unlikely to attract as many viewers as a live match with punditry input. In fixing the annual fee payable to Mr Barnes, Sky did not stipulate the minimum days of services, only the maximum. In real terms, the number of days Mr Barnes would appear on air for Sky varied from 90 to 120 days. Taking 120 days as the benchmark, it means Mr Barnes could be working 25% less than the benchmark maximum without any issue being raised by Sky. I do not consider the annual fee resemble a ‘salary’ in nature as submitted for the respondents. I find the annual fee to be a block fee, for the exclusive right to have first call of Mr Barnes’ services for a period of time. To ensure that Mr Barnes’ services would not be made available to another UK broadcaster, Sky was content to pay a premium for the assurance of exclusive right, in full knowledge that Mr Barnes’ availability on air could vary up to 25%, as reduced by the duration of 6-8 weeks the World Cup tournament.

(4)

The provisions for intellectual property rights under clause 10 would place no embargo on Mr Barnes’ right to reproduce his opinions elsewhere that had been given during a live broadcast for Sky. The work pattern for the match on Saturday 10 November 2018 (at §§51-56) illustrates the intensity of preparation in the run-up to cover for a live match, and immediately after the match, Mr Barnes would be putting pen to paper to produce his Sunday Times column. In his journalistic output, Mr Barnes would most likely be reproducing aspects of his commentary given in the Sky broadcast on the same match. The phrasing and the emphasis might differ for the column, but it would be the same match from which Mr Barnes had gleaned insights as a live commentator while broadcasting for Sky, and he was not debarred by Sky in reusing any material so gleaned in other domains or avenues. One such avenue would be when Mr Barnes participated as an expert representative to select the ‘Player of the Season’ for the European Cup. The material that Mr Barnes had used to provide his services for Sky remained his intellectual property, essentially because he is the master and the creator of his opinions as a pundit.

(5)

Sky would not consider it to be a conflict of interest when Mr Barnes reproduced in newspapers material which had been gleaned in the course of providing his services to Sky. On the contrary, Sky would be attuned to the publicity benefits conferred on its broadcast when Mr Barnes’ column on the match broadcast by Sky would cover the back page of the Sunday Times the next day. Mr Barnes’ Times/Sunday Times columns would take some of Sky’s games to the newspaper readers, and Sky in turn benefitted from the reputation of Mr Barnes as a renowned columnist on its roster of commentators.

(6)

Mr Barnes had much latitude in stating his availability to cover live matches for Sky. The conduct between the parties in drawing up booking schedules of Mr Barnes’ time would appear to be by gentlemanly consensus, with Sky being reasonable in its requests, and Mr Barnes exercising his leeway of refusal pursuant to the express term under Key Terms (c1.1) on ‘variations’ agreed between the parties from time to time. There was the long-standing understanding between the parties that Mr Barnes would be unavailable to Sky during the Six Nations season, and the World Cup tournament, although he could be requested for interviews by Sky Sports News. What Sky lost in terms of Mr Barnes’ availability was gained in return through the publicity of having one of its regular commentators as a columnist of these high-profile games, which in turn reflected well on Sky as the broadcaster with the exclusive right to Mr Barnes’ services.

(7)

Depending on his availability, Mr Barnes would agree to be interviewed for Sky Sports News during pre-match on request, especially for matches not broadcast by Sky such as the Six Nations and the World Cup. The news interviewer of Mr Barnes might have been an employee for Sky, but it would be most unusual for an employer to interview its employee regularly on request (if Mr Barnes were Sky’s employee). The context in which Mr Barnes became a regular candidate to be interviewed by Sky Sports News was his reputation as a rugby union expert, well-known and well-regarded outside Sky TV. It was Mr Barnes’ personal reputation in this respect that Sky contracted with SLB to ensure it could have regular access and first call. The fact that Sky Sports News sought to interview Mr Barnes is a strong indicator that the contractual relationship in real terms was not that of a master-servant relationship in a contract of employment.

(8)

Outside his Sky commitments, Mr Barnes was in business on his own account. The 31 articles published during the 2015 World Cup illustrate the competitiveness of the field to maintain parity as a sought-after sport pundit. Other expert voices were called on to give coverage of the tournament, each jostling for a unique angle to sum up a match, for insightful comments on a player or a team that would prove to be prophetic.

(9)

To maintain his profile as a pundit, Mr Barnes’ experience as a professional ex-player has stood him in good stead. It is in part his experience as a former player that he can profit from dedicating hours and days to watching replays of matches dimming out the sound, in order to find that unique angle for his commentary, to gain fresh insights so that his opinions do not become stale. There was no demarcation in the research, the thinking, the scripting he did for Sky broadcast and the newspaper columns, or indeed in any other ancillary engagements he undertook, (such as being an expert witness to the court on Farrell; or as representative to select the ‘Player of the Season’ for the European Cup). It was the one and the same enterprise of being ‘StuartBarnes, the voice of rugby’.

(10)

The profit Mr Barnes can make from the sound management of his business is through the efficient use of his time, and he did so with his engagements with Sky writing the Sky online column on a Monday, doing the Rugby Club mid-week, fitting his broadcasting engagements round his newspaper commitments.

(11)

In Basic Broadcasting Ltd v HMRC [2022] UKFTT 00048 (TC)(‘BBL’) in relation to the services provided by Adrian Chiles to ITV and the BBC, it is found that ‘[e]very time [Mr Chiles] presented a programme his reputation was at risk’. In common with this finding in BBL, there was a reputational risk for Mr Barnes every time he appeared on air for Sky, whether it was for a live commentary or for an interview by Sky Sports News. As stated in the questionnaire response, which I accept, ‘any editorial issues that emanate from [Mr Barnes’] mouth are his own responsibility’ (§47 (6)). The reputational risk is real, and requires vigilance to mitigate, and is part and parcel for being in business on his own account which is staked largely on Mr Barnes’ profile as a world expert on rugby.

(12)

Mr Barnes was not financially dependent on Sky during the relevant period, notwithstanding the fact that the income from Sky accounted for some 60% of his overall turnover. In absolute terms, his income from the Times/Sunday Times was by no means modest. His refusal to enter into a new contract with Sky after 2019 to cover second division matches was another indicator that Mr Barnes was not financially dependent on Sky. There was no lack of contacts asking for Mr Barnes’ services and he had no need for an agent. If Sky had not procured exclusive right for Mr Barnes’ services as a broadcaster during the relevant period, through sound management of his time, Mr Barnes would most probably have found another outlet for his talent, owing to his personal reputation as a world-renowned expert on rugby. The reputation is personal to Mr Barnes, which was not, and is not, dependent on Sky.

[135] Having regard to the cumulative totality of the provisions in the hypothetical contract in the context of the parties’ conduct and intention, I conclude that the relevant Contracts would not have been contracts of employment for the duration of the relevant period. In reaching my conclusion I have not given any weight to the express provision in the Contracts in relation to the parties’ intention that Mr Barnes as the Personnel shall not be an employee of Sky.

[136] Separately, my conclusion is reached with the factor that Mr Barnes being in business on his own account as one of the many factors to be considered in the round. I also have regard to the fact that contractually Mr Barnes has been an employee of SLB since its incorporation in 2005, and technically would not have been in business on his own account. However, for present purposes, I have considered whether work done by Mr Barnes through SLB would, if it had been done by Mr Barnes on his own account, give rise to the conclusion that he was in business on his account during the relevant period. In so finding, I have regard to Sir David Richards’ observation in Atholl House at [124]:

‘If the person providing the services is known to carry on a business, profession or vocation on their own account as a self-employed person, it would in my judgment be myopic to ignore it, when considering whether or not the parties intended to create a relationship of employment. … The weight to be attached to it is a matter for the decision-making court or tribunal. ..’”

Further, Mr Firth submitted that this Tribunal ought to follow Barnes in reliance upon the principle of comity. In essence, Mr Firth’s submission was that whilst a First-tier Tribunal decision was not binding upon another First-tier Tribunal, the later tribunal should seek to achieve consistency with previous tribunals unless convinced the earlier decision was wrong. In HMRC v Procter & Gamble UK [2009] EWCA Civ 507, the Court of Appeal stated as follows per Jacob LJ at [43]:

“[43] Finally I should say a word about a decision of a differently constituted Tribunal concerning a product called Pringles Dippers (2003) VAT Decision 18381. It was decided that this was zero-rated. Part of the decision was devoted to the question of whether a Pringle Dipper was “made from the potato.” It was held not, although the amount of potato was broadly the same as for a Regular Pringle. The present Tribunal took the view that the earlier Tribunal had erred in law this respect, though there were other reasons (having no parallel with the present case) why the ultimate decision was justifiable. The present Tribunal were entitled to take that view – there is no rule of stare decisis between Tribunals of co-ordinate jurisdiction. Rightly it did so only when convinced the earlier decision was wrong – for broadly Tribunals should strive to achieve consistency amongst themselves. But once so convinced it was its duty to apply the law as it considered it to be. As far as we are concerned it was the present Tribunal which approached the question “made from the potato” correctly in law.”

By way of summary, Miss Hirsch submitted as follows:

Miss Hirsch drew close parallels with the First-tier Tribunal decision in Alan Parry Productions Ltd v HMRC [2022] UKFTT 194 (TC) (“Parry”) (Judge Beare), noting that the contracts in question were substantially similar to the present case and that the First-tier Tribunal held that the Intermediaries Legislation applied.

Miss Hirsch agreed that the principle of comity means that, whilst a judge of first instance is not bound by a decision of another judge of first instance, the approach of the earlier decision should be followed unless it is wrong. Amongst other decisions, Miss Hirsch referred to the First-tier Tribunal decision of Greencyc Ltd v HMRC [2021] UKFTT 0480 (TC) (Judge Aleksander) at [44]:

“[44] Second, there is a certain irony in Mr Baig’s submission that I am not bound by Judge Mosedale’s decision in First Class Communications (as to which he is correct), yet he refers me to various other decisions of the First-tier Tribunal (such as Dreams and JSM Construction) in support of his submissions both in relation to recategorization and the extension of time for the service of the costs regime opt-out notice. Although not cited to me, I would note the comments made by Judge Brooks in Ardmore Construction Limited v HMRC [2014] SFTD 1077 at [19] that decisions of the First-tier Tribunal:

[…] constitute persuasive authorities which would be expected to be followed by the FTT. For example in HMRC v Abdul Noor [2013] UKUT 71 (TCC) the Tax and Chancery Chamber of the UT, in relation to the decision of one High Court Judge on another (but equally applicable in the case of any persuasive authority), said, at [82]:

“[…] although the decisions were not binding on him in the way that a decision of the Court of Appeal would be binding, the decision of a High Court Judge ought to be followed by another [High Court] judge unless that judge thinks that the earlier decision was clearly wrong”

As Lord Goddard CJ put it in Huddersfield Police Authority v Watson [1947] KB 842, at 848:

“I can only say for myself that I think the modern practice, and the modern view of the subject, is that a judge of first instance, though he would always follow the decision of another judge of first instance, unless he is convinced the judgment is wrong, would follow it as a matter of judicial comity.”

In any event, Miss Hirsch submits that Barnes is wrong and, in any event, turns upon different facts to the present case. Indeed, Miss Hirsch submits that the approach taken in Parry is to be preferred and followed.

The submissions set out above in respect of the principle of comity were the subject of written submissions, for which permission was given at the end of the oral hearing. In the event, Miss Hirsch also provided further written submissions (which she also sought permission to rely upon) on the effect of RWG (being the Upper Tribunal decision referred to above) as well as further written submissions on the substance of the case. Mr Firth objects to the reliance upon written submissions beyond those on the principle of comity. However, we grant permission because these are matters which are relevant to the decision the Tribunal has to make, the Upper Tribunal decision in RWG was released after the end of the oral hearing in the present case, the further submissions are in essence only limited extensions to previous submissions, and (crucially) Mr Firth has helpfully responded to them in full in his own written submissions.

Miss Hirsch’s additional submissions can be summarised as follows:

Mr Firth’s submissions in response can be summarised as follows:

In accordance with Atholl House, we begin by making our findings as to the terms of the actual contractual arrangements between the Company and Sky on the one hand and the Company and Mr Thompson on the other.

We have already set out the express terms of the Contract between the Company and Sky at paragraphs 7 to 9 above and we adopt these for this purpose. We note that (save as set out below) the parties’ summaries of those terms are broadly the same as our findings. Nevertheless, we treat the actual Contract as in accordance with our findings rather than adopting any other summary as these more accurately (and for the most relevant terms, directly) reflect the express terms of the Contract.

A point of construction arises as to the meaning of “on an ad hoc as and when required basis” within the definition of Services in the Key Terms. We do not accept that this is to be construed as meaning that Mr Thompson or the Company had a right to refuse any request by Sky or that appearances would be by mutual agreement. We find that the proper construction is that the Services were to be provided whenever Sky required them. This is for the following reasons. First, “ad hoc” simply means that there was no contractually defined or fixed occasion for the provision of the Services. Secondly, “required” is as required by Sky as it is referring to when Mr Thompson’s services are to be provided to Sky. Thirdly, the Contract as a whole envisages Sky being able to decide when the Services are to be provided. In particular, paragraph 2.1 of the Terms and Conditions requires the Company to procure that Mr Thompson provide the Services, paragraph 2.7 provides Sky with “first call” on his Services, and paragraph 4 provides for the Company and Mr Thompson to comply with Sky’s directions and requests. Fourthly, neither the definition of Services nor any other relevant term of the Contract states that the Company or Mr Thompson’s agreement is necessary. Fifthly, if the term included a requirement of mutual agreement or a right to refuse, Mr Thompson could in principle refuse to agree to any engagements at all, which would not make business sense and again would be contrary to Sky’s ability to require performance.

We do not accept that there was an implied term to the effect that Mr Thompson or the Company had a right to refuse any request by Sky or that appearances would be by mutual agreement. For the reasons set out above, this would be inconsistent with our construction of the express terms of the Contract. Further, this is not necessary in order to give business efficacy to the Contract or so obvious that it goes without saying. The Contract has a clear meaning that Sky has an entitlement to require Mr Thompson’s services whenever they require. We accept that on its own this could be treated as entitling Sky to require Mr Thompson’s services every hour of every day, or for such other unreasonable frequency or duration. This could (and, we find, would) be resolved by an implied term of reasonableness, such that the Assignment would be on an ad hoc as and when reasonably required basis. This would remain consistent with the remainder of the Contract and places the emphasis upon Sky’s requirements rather than importing a right of refusal or mutual agreement which is unnecessary. In any event, even if we did not imply such a term of reasonableness, the clause remains unambiguous and would be inconsistent with Mr Firth’s implied terms as to a right of refusal or a requirement of mutual agreement.

For completeness, we note that HMRC submitted that, if there was a term that Mr Thompson was entitled to refuse to attend any particular engagement, it would be an implied term that he could not do so unreasonably. Given that we have found that Mr Thompson does not have a contractual right to refuse the engagement providing Sky’s request is a reasonable one, HMRC’s proposed implied term does not arise.

It follows that, for the same reasons as set out above in respect of the construction and implied term arguments, we do not accept Mr Firth’s submission that the Contract is too vague. Indeed, it is clear and unambiguous; the Contract provides for Sky to be entitled to have the Services delivered as and when Sky requires.

Paragraph 4.1 of the Terms and Conditions for the 2013 Contract (substantially replicated as paragraph 4.1(a) of the Terms and Conditions for the 2015 Contract) which provides that, “the Services will be rendered to the best of the Company’s and the Personnel’s abilities and all directions and requests given by BSkyB or its nominees will be complied with.” We do not accept Mr Firth’s submission that this is to be construed as meaning that Sky is unable to require Mr Thompson to express opinions which he did not believe or otherwise to control what he says or to restrict his opinions. This paragraph is unambiguous and does not make any reference to Mr Thompson’s opinions. As such, there is no room for Mr Firth’s construction.

However, we do agree that it cannot be that the parties intended there to be no fetter at all upon the directions and requests. We find that in such circumstances there is an implied term of reasonableness, such that the Services will be rendered to the best of the Company’s and the Personnel’s abilities and all reasonable directions and requests given by BSkyB or its nominees will be complied with. This is necessary in order to give business efficacy to the Contract as otherwise Mr Thompson could be required to comply with inappropriate directions and requests or directions and requests. Similarly, given the emphasis on reasonableness elsewhere in the Contract and as part of the factual matrix as a whole, we find that it is so obvious to go without saying that the parties did not intend that Sky be entitled to make or give unreasonable directions and requests. It might well be, therefore, that in practice Mr Thompson would not be obliged to express opinions which he did not believe or otherwise to control what he says or to restrict his opinions. However, this is a feature of such a direction or request being unreasonable and in breach of the implied term rather than being the proper construction of paragraph 4.1 (or paragraph 4.1(a)) itself. We are fortified in this view by the fact that Mr Firth submitted that the hypothetical contract would include requiring compliance with reasonable directions and requests, to which (in oral submissions) Miss Hirsch agreed.

We note that neither Mr Firth nor Miss Hirsch raised any issues as to construction or implied terms in respect of paragraph 2.6 of the Terms and Conditions of the Contract, which provides that, “The Company shall procure that the Personnel shall travel to and perform the Services at any destination both inside and outside the Territory and at such time and dates (including bank holidays and weekends and anti-social hours) as may be required by BSkyB.” We therefore assume that the parties accept that paragraph 2.6 does not provide for any right to object to the location of the required provision of the services. In any event, we find that the proper construction is that there is no such right as the term is unambiguous in giving Sky control over the location. However, for the same reasons as set out in respect of the directions and requests, we find that this is subject to an implied term of reasonableness.

There is no evidence as to any agreement between Mr Thompson and the Company. The only written contract signed by Mr Thompson himself is the Schedule, which effectively bound Mr Thompson into various of the terms of the Contract. Indeed, this goes slightly further than the Contract, in that it includes a non-compete clause. Although not signed by the Company or Sky, it is signed as a deed, and is addressed to Sky.

We now move to ascertain the terms of the hypothetical contract between Mr Thompson and Sky.

Save for the following modifications, we find that the hypothetical contract would contain the same the express terms of the Contract set out in paragraphs 6 to 9 above and in accordance with our construction as set out in paragraphs 44 to 53 above.

The first modification is that services would be provided by Mr Thompson rather than by the Company. This modification is because the relevant provider of the service would be Mr Thompson in his own right rather than the Company procuring the provision of Mr Thompson’s services.

The second modification is that the services themselves would be narrower and more closely defined than in the Contract, being only Soccer Saturday, mid-week games, associated marketing and publicity events, and relevant interviews (such as news items relevant to Liverpool). Further, when acting as a panellist, Mr Thompson was entitled (and required) to give unfettered opinions and analysis providing these were within the confines of Ofcom broadcasting standards and requirements. We reach this view because we assume that a direct contract between Sky and Mr Thompson would be likely to address Mr Thompson’s own role. In such circumstances, it would be likely to reflect what, at the time of the Contract being entered into, was an already well-defined arrangement as to what programmes Mr Thompson would appear on.

The third modification is that the implied terms set out above would be express terms insofar as they would have been specifically addressed in a direct contract between Mr Thompson and Sky. This is because as regards the actual Contract it was so obvious as to go without saying and so, if hypothetically raised for the purposes of the hypothetical contract, it would be expressly included in that hypothetical contract. As such, the Assignment would be on an ad hoc as and when reasonably required basis. Further, there would be a requirement of compliance with all reasonable directions and requests given by Sky or its nominees. Even if they were not express terms, they would still be terms of the hypothetical contract as they would be implied for the same reasons as in respect of the actual Contract.

We reject Mr Firth’s submission that the hypothetical contract would have included a term that Mr Thompson would have the right to refuse any request by Sky to provide the services. For the reasons set out above in respect of the express and implied terms of the actual Contract, this is not what was agreed between the Company and Sky and there is no basis for establishing that a different agreement would be reached in the event of a hypothetical contract between Mr Thompson and Sky. Indeed, Mr Thompson signed the Schedule in which he gave undertakings to Sky through which he agreed to carry out the Services (as defined in the Contract and so including the provisions as to “as and when required” and “first call”) in accordance with the Contract between the Company and Sky (as set out in paragraphs 3.1 and 8.2 of the Schedule). As such, there is no reason to believe that a direct negotiation between Mr Thompson and Sky would have resulted in substantially different terms, still less terms diametrically opposed to those in the Contract as regards Sky’s ability to require performance.

We do not accept that the evidence of the informal arrangements for Mr Thompson’s appearances on Sky affect the position. In practice, Mr Condron agreed to accommodate Mr Thompson’s rare non-attendances. Both Mr Thompson and Mr Condron treated this as Mr Thompson notifying Mr Condron in advance out of respect rather than requiring agreement. Nevertheless, as set out above, the contractual rights and obligations in the actual contracts did not give Mr Thompson the right of refusal and did not require mutual agreement. The pragmatic and consensual approach taken to non-attendance does not detract from those contractual rights and there is no suggestion that there was any agreement that those contractual rights did not apply or were varied. Indeed, Mr Condron’s evidence was that he did not consider the terms of the Contract. Given that Sky did not provide for a right of refusal for Mr Thompson or mutual agreement in the 2013 Contract and the 2015 Contract and given that Mr Thompson himself agreed to the terms of the 2013 Contract and the 2015 Contract by virtue of the Schedule, it is reasonable to assume (and we find) that no such terms would be provided for in a hypothetical contract between Mr Thompson and Sky.

We also reject Mr Firth’s submission that the hypothetical contract would have included a term that the location of interviews and promotional events would be subject to agreement between the parties. Again, this would be inconsistent with the express terms of the actual Contract, which provide for Sky to be able to decide the location of the services. The fact that as a matter of practice the services were delivered in the Sky studios in London or alternatively in Liverpool does not mean that Sky was not entitled under the actual Contract to require attendance at different locations. Again, given that Sky did not provide for mutual agreement as to locations in the 2013 Contract and the 2015 Contract and given that Mr Thompson himself agreed to the terms of the 2013 Contract and the 2015 Contract by virtue of the Schedule, it is reasonable to assume (and we find) that no such term would be provided for in a hypothetical contract between Mr Thompson and Sky.

We find that the remainder of the terms in the Contract would apply to the hypothetical agreement. Again, this is because they represented the terms agreed between the Company and Sky and were the subject of the Schedule signed by Mr Thompson. As such, both Sky and Mr Thompson were in fact agreeable to those terms and so there is no reason why they would not be agreeable to them in the event of a direct agreement between them by way of the hypothetical contract. Given that the Contract included the Schedule, the hypothetical contract would for the same reasons include the non-compete clause at paragraph 4.2 of the Schedule.

We note that Mr Firth included within his submissions some terms of the hypothetical contract which went beyond summaries of the terms in the Contract. We have already dealt with those relating to when and where the services were to be provided above.

The other terms which on the face of it went beyond the actual Contract were that preparatory work could be carried out at places and times and for durations of Mr Thompson’s choosing and that Mr Thompson would be expected to fit his punditry into the running order of the programme determined by Sky and to follow reasonable directions and instructions as to the subject matters on which he gave his opinion, but the content would be determined solely by Mr Thompson. These terms are entirely consistent with the terms of the actual Contract in that the Contract does not restrict when and for how long Mr Thompson prepares and does not restrict the content of Mr Thompson’s opinions (providing it is appropriate for the purposes of Ofcom and broadcasting requirements, which would be catered for by the ability for Sky to give reasonable directions and instructions). Given that a direct contract between Mr Thompson and Sky may well have provided more detail as to his role (as we have found above) we agree that this greater detail would also have been in the hypothetical contract. We note that Miss Hirsch did not dispute that these would be terms of the hypothetical agreement (although we are of course not bound by that lack of dispute).

We now turn to whether the hypothetical contract would be a contract of employment. In doing so, we consider the three-stage test in Ready Mixed Concrete as set out above.

We agree with both parties that there is mutuality of obligation. Mr Thompson’s obligation under the hypothetical contract would be to provide the services in accordance with the terms of the contract, and Sky’s obligation would be to pay the agreed fee.

We find that there is a sufficient framework of control for the purposes of stage two of the Ready Mixed Concrete test. This is for the following reasons.

We find that the hypothetical contract would have been a contract of employment. This is for the following reasons.

Standing back, these factors combine together to make the hypothetical contract a contract of employment. No term of the hypothetical contract is inconsistent with an employment contract. To the contrary, the terms of the hypothetical contract and the circumstances in which the professional relationship was performed were consistent with an employment contract.

We note that we have not taken into account the fact that Mr Thompson later became an employee or any similarity or difference after he became an employee when compared with before. This is because, by its very nature, this post-dates the relevant period.

We also note that we have reached a contrary conclusion to the result in Barnes. We find that this is in accordance with the principle of comity because the facts of Barnes are different to the present case, with the effect that the multi-factorial assessment has resulted in a different outcome. In particular, Mr Barnes appears to have been in business on his own account to a greater degree than in the present case as Sky accounted for 60% of the appellant’s turnover. Importantly, a feature of Barnes was that Mr Barnes was entitled to (and appears to have been encouraged) to reproduce his opinions elsewhere in other media. In the present case, Mr Thompson was more constrained. Further, all Mr Barnes’ engagements contributed to what Judge Poon referred to at [134] (10) as being, “one and the same enterprise of being ‘StuartBarnes, the voice of rugby’.” By contrast, as set out above, Mr Thompson was more closely associated with Sky than any other professional activities that he was carrying out at that time.

Similarly, we do not treat ourselves as being bound by the outcome in Parry and are not constrained to follow Parry by the principle of comity as, whilst the underlying contracts were similar, the factual differences as to how those contracts operated when compared to the present case require their own analysis. As such, although we have reached the same outcome as in Parry, this is the result of our own multi-factorial assessment in the present case as set out above.

It follows that, for the reasons set out above, we dismiss the appeal.

This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.