Bryan Robson Limited v The Commissioners for HMRC

the Ambassador Agreement;

the Guarantee Agreement;

the Personal Ambassador Agreements; and

schedules setting out the income of the Appellant in the tax years which are the subject of this decision and the period immediately prior to those tax years.

email exchanges between Mr Robson and MUFC personnel;

invoices from the Appellant to MUFC; and

extracts from sponsorship agreements between MUFC and a number of its sponsors

the recitals to the agreement noted that:

the first clause of the operative part of the agreement was headed “Use of Ambassador’s Image” and contained the grant of a licence by the Appellant to MUFC to use and exploit Mr Robson’s image, in both a personal and a club context, throughout the world and “for any purpose” for the term of the agreement;

in terms of Mr Robson’s image rights, this licence was supplemented by:

the second clause of the operative part of the agreement required the Appellant to procure that Mr Robson made personal appearances for any purpose required by MUFC in accordance with the club’s reasonable instructions including as to:

and to autograph merchandise in accordance with the club’s reasonable instructions;

as regards Mr Robson’s personal appearances, the agreement:

clause 4 of the agreement provided that Mr Robson could enter into any sponsorship, marketing or promotional activities (together, “personal endorsement deals” and, each, a “personal endorsement deal”) as long as MUFC’s prior written approval to the relevant personal endorsement deal had been obtained (such approval’s not to be unreasonably withheld or delayed). It went on to stipulate that, without prejudice to the club’s general right of approval, no personal endorsement deal could involve, inter alia:

clause 5.1 of the agreement imposed obligations on the Appellant to procure that Mr Robson:

clause 6 of the agreement provided that MUFC would pay the Appellant the sum of £150,000 (excluding VAT) for each six–month period during the term of the agreement. The clause did not apportion those payments between the various obligations of the Appellant under the agreement and made no provision for any refund of the fees already paid in the event that Mr Robson failed to satisfy the minimum commitment in any six–month period. Payment in respect of each six–month period was required to be made within 28 days of the start of the relevant six–month period. A peculiar feature of the clause is that it purported retrospectively to provide that payments made under the Personal Ambassador Agreements on and after 1 July 2012 had in fact been made under the Ambassador Agreement instead;

clause 7 of the agreement provided that, unless terminated by either party with immediate effect because of certain specified events of default, it would continue until terminated by either party on six months’ notice. The Appellant’s potential events of default included, inter alia:

The clause went on to provide for a pro–rata refund in the event that, at the point of termination, MUFC had not enjoyed the rights for which a payment had been made;

clause 10 of the agreement provided that a failure on the part of either party to fulfil its obligations under the agreement because of force majeure would not constitute a breach of the agreement;

clause 13.8 of the agreement provided that the agreement comprised the entire agreement between the parties in relation to its subject matter and that any amendment to it had to be in writing;

clause 13.9 of the agreement provided that it was a contract for the provision of services and not a contract of employment; and

the agreement contained no provisions:

a warranty and undertaking from Mr Robson to the effect that the Appellant had the right to use his name and image and to enter into all of the obligations on the part of the Appellant which were contained in the Ambassador Agreement; and

a guarantee by Mr Robson of the Appellant’s obligations under the Ambassador Agreement. Mr Robson’s liability under the guarantee was expressed to be that of primary obligor and to remain in force notwithstanding any defect, illegality or unenforceability of any obligation of the Appellant under the Ambassador Agreement.

each agreement referred in its recitals and its operative clauses to the fact that MUFC was being given the right to use Mr Robson’s image and to utilise the services of Mr Robson in an ambassadorial role;

each agreement required Mr Robson:

each agreement provided for the payment of a fixed fee and stipulated that payments of the fee to the Appellant would discharge the club from its payment obligation to Mr Robson;

each agreement stipulated that it represented the entire agreement between the parties and could be amended only by an agreement in writing between the parties;

each agreement stipulated that it was not intended to create an employer/employee relationship between the parties;

the First Personal Ambassador Agreement did not provide for a minimum number of personal appearances but stipulated that the club would be entitled to terminate the agreement if Mr Robson was unable or unwilling to make a personal appearance on three or more occasions during the term whereas the Second Personal Ambassador Agreement and the Third Personal Ambassador Agreement did provide for a minimum number of personal appearances and, although they contained a similar termination right to the one set out in the First Personal Ambassador Agreement, that right was stated not to apply in circumstances where Mr Robson had reached his minimum number of personal appearances; and

the First Personal Ambassador Agreement stipulated that Mr Robson could not enter into a personal endorsement deal with any competitor of the club or a sponsor without the prior written consent of the club whereas the Second Personal Ambassador Agreement and the Third Personal Ambassador Agreement went further than that and stipulated that Mr Robson could not undertake any personal endorsement deal at all without the prior written approval of the club, such approval’s not to be unreasonably withheld or delayed.

in the period from 3 December 2019 to the end of the tax year ending 5 April 2020, the aggregate income of the Appellant was £171,500 of which approximately 87% was the fixed fee instalment payable under the Ambassador Agreement, approximately 12% was attributable to work for sponsors and approximately 1% was attributable to work for MUTV; and

in the tax year ending 5 April 2021, the aggregate income of the Appellant was £319,000, of which approximately 94% was the fixed fee instalments payable under the Ambassador Agreement, approximately 1% was attributable to work for MUTV and approximately 5% was attributable to work for persons unrelated to MUFC or sponsors.

in the tax year ending 5 April 2017, the aggregate income of the Appellant was £425,000, of which approximately 70% was the fixed fee instalments payable under the Third Personal Ambassador Agreement and at least 80% was attributable to work for MUFC and sponsors;

in the tax year ending 5 April 2018, the aggregate income of the Appellant was £379,500, of which approximately 79% was the fixed fee instalments payable under the Third Personal Ambassador Agreement and at least 90% was attributable to work for MUFC and sponsors; and

in the tax year ending 5 April 2019, the aggregate income of the Appellant was £462,000, of which approximately 65% was the fixed fee instalments payable under the Third Personal Ambassador Agreement and 90% was attributable to work for MUFC and sponsors.

when the Image Rights Issue falls to be addressed, it is necessary to consider whether all of the consideration which relates to Mr Robson’s personal appearances can be said to relate to an obligation personally to perform services or whether some part of that consideration should properly be said to relate to something else, such as Mr Robson’s image rights; and

when the Employment Issue falls to be addressed, it is necessary to consider what weight should be given in this case to the long–standing principle applicable in cases under the IR35 legislation to the effect that an inability on the part of the worker to provide a substitute is a factor which is indicative of a contract of employment, given that the essence of the contract in this case is the identity and reputation of the worker himself and therefore the personal appearance of the worker is fundamental to the service that is obliged to be provided.

the first instance decisions in Sports Club plc v Inspector of Taxes [2000] STC (SCD) 443 (“Sports Club”) and Hull City AFC (Tigers) Limited v The Commissioners for Her Majesty’s Revenue and Customs [2019] UKFTT 227 (TC) (“Hull City”) were authority for the proposition that a contract for the licence or sale of intellectual property rights did not give rise to employment income; and

the language used in Section 49 of the ITEPA and Regulation 6 of the NICs Regulations meant that the IR35 legislation applied only to contracts providing for the personal performance of services and not to composite contracts which provided for both a licence or sale of intellectual property rights and the personal performance of services.

no valuation of the image rights had ever been carried out; and

the parties had never discussed the value of the image rights.

the appellant did not:

there was little, if any, prospect of the appellant’s exploiting those rights;

those rights had never been commercially exploited; and

the appellant had not adduced any evidence to show that those rights had had any commercial value.

Mr Robson’s image rights had considerable value to MUFC;

the club had a genuine interest in exploiting those rights; and

the club did in fact exploit those rights.

at the hearing, Mr Rivett submitted that any part of the consideration payable under the Ambassador Agreement which was attributable to the limitations placed on Mr Robson under the agreement as regards his personal endorsement deals was referable to the licensed image rights, whilst Mr Stone said that those limitations were imposed on Mr Robson in order to protect the respective brands of MUFC and the sponsors and not in order to protect the value of Mr Robson’s image itself. Mr Stone pointed out that, if Mr Robson were to agree to promote a sponsor’s competitor, then that would be unlikely to have a detrimental impact on the value of Mr Robson’s image itself. Indeed, it might well enhance that value.

Whilst I do not decide this point conclusively until hearing the submissions in relation to quantum, I am presently inclined to think that, even if Mr Robson’s promotion of a sponsor’s competitor would not have had a detrimental impact on the value of Mr Robson’s image itself, the value to MUFC of the licence of that image might well have been reduced by such activities and therefore the limitations might well have been included in order to protect the value to the club of the licensed rights which it had acquired. In effect, those limitations were equivalent to the negative contractual obligations to which reference was made by the SCs in Sports Club mentioned in paragraph 56 above. If that is right, then, to the extent that any part of the consideration passing under the Ambassador Agreement was attributable to the Appellant’s agreement to those limitations, that part should properly be seen as relating to the image rights; and

a similar point can be made in relation to the obligations which were set out in the Ambassador Agreement as regards Mr Robson’s general conduct. Whilst I do not decide this point conclusively until hearing the submissions in relation to quantum, I am presently inclined to think that, if Mr Robson were to have brought himself into disrepute by virtue of his conduct, then that would have had a detrimental impact on Mr Robson’s image and thus the value to the club of the image rights which were being licensed to it under the agreement. If that is right, then, to the extent that any part of the consideration passing under the Ambassador Agreement was attributable to the Appellant’s agreement to those obligations, that part should also properly be seen as relating to the image rights.

Mr Robson’s evidence was that there had been no assignment in writing of those image rights by him to the Appellant; and

each Personal Ambassador Agreement was drafted on the basis that Mr Robson’s image rights were owned by him and not the Appellant at the date when the relevant Personal Ambassador Agreement was executed and it seems unlikely to me that ownership of those rights would have passed from Mr Robson to the Appellant without Mr Robson’s being aware of it between the date when the Third Personal Ambassador Agreement was executed and the date when the Ambassador Agreement was executed.

first, regardless of whether Mr Robson’s image rights as at the date when the Ambassador Agreement was executed remained vested in Mr Robson or had been assigned to the Appellant, it is apparent from the terms of the Ambassador Agreement and the Guarantee Agreement that each of MUFC, the Appellant and Mr Robson was proceeding on the basis that the rights in question were vested in the Appellant and that the Appellant was in a position to license the relevant rights to MUFC;

secondly, even if the Appellant did not own the relevant rights, Mr Robson was obliged by virtue of his obligations under the Guarantee Agreement to ensure that MUFC obtained the benefit of the licensed image rights and therefore MUFC became entitled to the licensed image rights as a result of the contractual arrangements as a whole;

thirdly, even if, contrary to the second point, the effect of the Ambassador Agreement and the Guarantee Agreement was not to confer on MUFC the benefit of the licensed image rights, that does not detract from the fact that some part of the consideration which MUFC paid under the Ambassador Agreement was referable to the benefit of the licensed image rights. That was what MUFC was paying for, even if it may have been mistaken in thinking that that was what it was getting in return for the payment; and

finally, if I am right in my conclusion in paragraphs 117 to 121 below that all of the terms of the Ambassador Agreement (including those which are referable to the licensed image rights) are to be taken into account in constructing the hypothetical contract between the club and Mr Robson, then the position under that hypothetical contract should be the same as if the club and Mr Robson had entered into a composite agreement directly on the same terms as that hypothetical contract and therefore the hypothetical contract is to be treated as including a licence of the image rights from Mr Robson to the club.

the appeal against the Determination in respect of the tax year ending 5 April 2020 should be allowed to the extent that the consideration passing under the Ambassador Agreement on or after 3 December 2019 was attributable to the licensed image rights;

the appeal against the NICs Decision in respect of the tax year ending 5 April 2020 should be allowed to the extent that the consideration passing under the Ambassador Agreement on or after 3 December 2019 was attributable to the licensed image rights;

the appeal against the Determination in respect of the tax year ending 5 April 2021 should be allowed to the extent that the consideration passing under the Ambassador Agreement was attributable to the licensed image rights; and

the appeal against the NICs Decision in respect of the tax year ending 5 April 2021 should be allowed to the extent that the consideration passing under the Ambassador Agreement was attributable to the licensed image rights.

Stage 1 – find the terms of the actual contracts (between MUFC and the Appellant, on the one hand, and between the Appellant and Mr Robson, on the other) and the relevant circumstances in which Mr Robson worked;

Stage 2 – ascertain the terms of the hypothetical contract (between MUFC and Mr Robson) by reference to the terms of the actual contracts and the relevant circumstances; and

Stage 3 – consider whether the hypothetical contract would be a contract of employment.

as I have not been provided with any evidence of an actual contract between the Appellant and Mr Robson, references to the “actual contract” are, except where the context requires otherwise, references to the contract between the club and the Appellant; and

references to the “hypothetical contract” are to the contract determined at Stage 2 by reference to the actual contract and the relevant circumstances.

the grounds of appeal by the Respondents related solely to the manner in which the UT in that case had approached Stage 3; and

the “Respondent’s notice” served by the taxpayer related solely to:

in determining the terms of the hypothetical contract, Sections 49(1)(c) and 49(4) of the ITEPA refer to the “circumstances” in which the services are provided and stipulate that those “circumstances” “include the terms on which the services are provided, having regard to the terms of the contracts forming part of the arrangements under which the services are provided”;

it follows that the terms of the actual contracts forming part of the arrangements will generally be highly material in determining the terms of the hypothetical contract but will not be determinative of them;

whereas the terms of the actual contracts should be determined by reference to the ordinary canons of contractual interpretation, those ordinary canons will not, of themselves, determine the contents of the hypothetical contract;

in addition, it is not necessary to defer all analysis of the hypothetical contract at Stage 2 until all of the terms of the actual contracts have been comprehensively determined at Stage 1. It might often be appropriate, in the iterative way identified by Lord Hodge JSC in Arnold v. Britten [2015] UKSC (“Arnold”) at paragraph [77], to construe the terms of the actual contracts whilst considering at the same time how the actual contracts would work in determining the content of the hypothetical contract;

when determining the terms of an actual contract, the parties’ subjective beliefs as to the meaning of the contract or ignorance of the contract’s terms will typically be irrelevant. Similarly, unless giving rise to a variation or some form of waiver or estoppel, the manner in which the actual contract is performed is typically irrelevant to its construction. However, those matters should not be regarded as being necessarily irrelevant in determining the terms of the hypothetical contract and are, in the view of the UT, matters that can appropriately be taken into account. This is because they are part of the “circumstances” which are required to be taken into account in determining the terms of the hypothetical contract. The UT observed that:

“The process of synthesising the hypothetical contract out of the actual contracts in fact agreed involves additional considerations, and not merely the usual processes of interpretation.”

As such, the parties’ subjective beliefs and conduct are relevant circumstances which need to be considered in determining the terms of the hypothetical contract at Stage 2, even if they do not affect the identification of the terms of the actual contracts at Stage 1;

it is not correct to construct the hypothetical contract simply by reference to the understanding by one of the parties of the terms of the actual contracts. That would be to place too much weight on matters not necessarily relevant to the construction of the hypothetical contract. Instead, the appropriate way to approach the task of constructing the terms of the hypothetical contract is to conduct a “counterfactual” exercise – in other words, to consider what the terms of the contract would have been if the client had contracted directly with the worker. In doing so, where the intermediary is under the control of the worker, the terms of the actual contract between the intermediary and the client is a safe starting point because that is what the client agreed with the intermediary and what the intermediary (which is controlled by the worker) agreed with the client;

in many cases, the worker and the client will have enjoyed a harmonious working relationship in which the precise terms of the actual contracts do not feature prominently as there will be no need for either party to insist on enforcing the strict terms of the actual contracts between the parties. It is therefore helpful in constructing the terms of the hypothetical contract to consider what might have happened in the event of certain hypothetical potential “flashpoints” – which is to say, postulating circumstances where one of the parties might have wished to stand on its rights as set out in the actual contracts against the wishes of the other party and then to consider what might then have occurred; and

these principles are as applicable in the case of the NICs legislation as they are in the case of the income tax legislation notwithstanding the fact that Regulation 6 in the NICs Regulations does not contain an equivalent to Section 49(4) of the ITEPA – which expressly directs attention to the terms of the actual contracts – because the provisions deal with similar and overlapping subject matter.

the general principle of contract law to the effect that, if a contractual right exists, it does not matter that it is not used. It nevertheless remains a term of the contract – see Autoclenz at paragraph [19] and White v. Troutbeck [2013] IRLR 286 (“Troutbeck”), at paragraph [44]; and

the principles explained in paragraphs 97(5) to 97(7) above to the effect that the parties’ subjective beliefs and conduct can, but will not necessarily, inform the terms of the hypothetical contract.

each Personal Ambassador Agreement stipulated that it set out the entire agreement between the parties and that no amendment could be made to it other than in writing;

in giving his evidence, Mr Robson had said that he did not consider that the replacement of the Third Personal Ambassador Agreement with the Ambassador Agreement had effected any change in the relationship between him and the club and had merely involved a change in the legal mechanics relating to his rights and obligations to reflect the fact that the Ambassador Agreement was with the Appellant and not with him; and

it followed that the hypothetical contract in this case should be regarded as having precisely the same terms as the Third Personal Ambassador Agreement. 

Section 48 of the ITEPA, which was the introductory section describing the scope of the IR35 legislation, stipulated that the IR35 legislation applied to “the provision of services through an intermediary”;

Section 49 of the ITEPA, which described the engagements to which the IR35 legislation applied, stipulated in Section 49(1) that it applied where the worker personally performed, or was under an obligation personally to perform, services for the client and in Section 49(5) that, in the IR35 legislation, an “engagement to which this Chapter applies” meant any such provision of services as was mentioned in Section 49(1); and

Section 50 of the ITEPA, which described the consequences of receiving a payment in respect of an engagement to which the IR35 legislation applied, stipulated that, in that case, the worker was to be treated as receiving a deemed employment payment in respect of the relevant engagement.

the only terms of the actual contract between the client and the intermediary which were to be taken into account were the terms relating to the services referred to in Section 49 of the ITEPA that were required personally to be performed; and

those terms of that actual contract which did not pertain to those services and instead related to something else, such as the licensed image rights, were not to be taken into account.

was for an indefinite term, subject to termination in accordance with the termination provisions of the actual contract and generally on six–months’ notice;

required Mr Robson to make sufficient personal appearances to satisfy the minimum commitment in each six–month period;

required Mr Robson to perform the work in person and did not allow Mr Robson to provide a substitute;

required MUFC to pay Mr Robson £150,000 (excluding VAT) for each six–month period;

specified that MUFC was responsible for arranging and paying for Mr Robson’s travel and accommodation when Mr Robson made a personal appearance and was required to reimburse Mr Robson for his other reasonable expenses provided that they were agreed in advance of being incurred and Mr Robson submitted an invoice for them with supporting receipts;

stated that nothing in the hypothetical contract should be taken as establishing a relationship of employer and employee between MUFC and Mr Robson;

did not require Mr Robson’s work for MUFC to have priority over Mr Robson’s other work;

contained no obligation on the part of Mr Robson to comply with guidelines, policies and procedures, undergo training or attend any review or feedback session;

contained no provisions entitling Mr Robson to receive holiday pay, sick pay or pension contributions; and

contained no sanctions for a breach of the contract by Mr Robson apart from a right for MUFC to terminate the hypothetical contract – in other words, contained no provisions entitling MUFC to discipline Mr Robson by way of suspension, demotion or refusal to provide work.

whether Mr Robson was compelled to accept all (or all but a small number of) requests for personal appearances made by the club – subject to limited exceptions such as there being prior arrangements previously communicated to the club, ill–health or exceptional personal circumstances, as set out in the actual contract (as the Respondents contended) – or whether Mr Robson was at liberty to accept only those requests for personal appearances made by the club which suited him (as the Appellant contended);

whether Mr Robson could accept personal endorsement deals only with the prior consent of MUFC as required by the actual contract (as the Respondents contended) or whether Mr Robson was free to accept whatever personal endorsement deals he wished to accept without obtaining the prior consent of MUFC provided that he did not promote a competitor of the club or one of the sponsors outside of his ambassadorial role for England (as the Appellant contended); and

whether the hypothetical contract included provision for Mr Robson to make personal appearances which did not count towards the minimum commitment in each six–month period, in return for additional fees (as the Respondents contended) or whether those additional personal appearances were instead made outside the terms of the hypothetical contract and pursuant to separate contractual arrangements between the Appellant on the one hand and MUFC or the relevant sponsor on the other hand (as the Appellant contended).

as long as Mr Robson satisfied the minimum commitment in each six–month period, he was free to turn down any request to make a personal appearance for any reason and without providing any explanation, with the result that where he worked, what work he did and how he did the work was a matter to be agreed by the parties from time to time; and

MUFC was required to provide Mr Robson with enough offers of personal appearances to enable Mr Robson to satisfy the minimum commitment in each six–month period after taking into account Mr Robson’s freedom of choice described in paragraph 129(1) above.

the hypothetical contract would have entitled Mr Robson to turn down as many requests as he wished;

the hypothetical contract would have included an obligation on MUFC to offer Mr Robson sufficient opportunities to make personal appearances as would allow Mr Robson to satisfy the minimum commitment in each six–month period no matter how many requests he refused; or

the parties had to agree to each personal appearance and therefore the hypothetical contract was no more than an overarching framework pursuant to which the parties could agree Mr Robson’s personal appearances from time to time.

first, he said that the point set out in paragraph 134 above overlooked the fact that MUFC had access to legends as well as ambassadors in order to fulfil the demands of sponsors. It was therefore possible that the terms of the hypothetical contract might have included a provision which entitled Mr Robson to turn down as many requests as he wanted to without exposing the club to a potential overall personal appearances shortfall; but

secondly, he appeared to accept that the point set out in paragraph 129(2) above might have been a slight over–reach on his part and that another way of formulating the point was that the hypothetical contract would have contained a term requiring the club and Mr Robson to work reasonably together in order to ensure that Mr Robson would be able to decline as many requests for personal appearances as he wished and still satisfy the minimum commitment in each six–month period.

the club had no obligation under the hypothetical contract to make any requests of Mr Robson to make personal appearances or to work together reasonably with Mr Robson in order to ensure that Mr Robson was able to satisfy the minimum commitment in each six–month period;

subject to the point set out in paragraph 137(3) below, the club had no remedy under the hypothetical contract in the event that Mr Robson chose to turn down any request for a personal appearance;

the club was entitled to a remedy under the hypothetical contract if Mr Robson failed to satisfy the minimum commitment in any six–month period as a consequence of his declining one or more requests; and

the club was not entitled to a remedy under the hypothetical contract if Mr Robson failed to satisfy the minimum commitment in any six–month period despite accepting all requests made of him by the club – in other words, solely because the club failed to request at least 35 personal appearances in the six–month period in question.

the club would not have accepted any kind of contractual obligation to make requests for personal appearances from Mr Robson or to work together reasonably with Mr Robson to enable Mr Robson to satisfy the minimum commitment in any six–month period. I say that because the club’s obligation under the Ambassador Agreement was essentially to pay the annual fee in clause 6 of the agreement and not to take on any obligations as regards requests for Mr Robson to make personal appearances. That was a matter for Mr Robson to deal with in return for his fee. As Mr Stone fairly pointed out, the club would never have agreed to terms which required it to take on any obligation to make requests for personal appearances;

subject to the point made in paragraph 138(3) below, the club would either not have sought to exercise its right under the actual contract – or would have backed down in the event that Mr Robson resisted the exercise of that right – to limit the number of occasions on which Mr Robson was entitled to decline requests. I say that because both Mr Robson and Mrs Edge were clear that Mr Robson was free to decline requests at will, subject only to his meeting the minimum commitment in each six–month period. I disagree with Mr Stone that the hypothetical contract would have contained any limitation on the number of requests that Mr Robson could turn down, whether it was three or a greater number, because, subject to the point that follows, the evidence suggests that MUFC would not have sought any contractual remedy simply because Mr Robson declined any number of requests to make personal appearances;

however, the club would have sought to exercise its right under the actual contract – and Mr Robson would not have resisted the exercise of that right – to a contractual remedy if Mr Robson were to have failed to satisfy the minimum commitment in any six–month period as a result of refusing too many requests in the six–month period in question. I say that because the club needed Mr Robson’s minimum number of personal appearances for its own purposes and to fulfil its obligations to the sponsors and Mr Robson was fully aware of his responsibilities in that regard. Mr Rivett’s submission that the club had access to legends to satisfy its own requirements and to fulfil its obligations to the sponsors is not an answer to this point because the legends were not under contract and were free to decline any request at will at any time. The whole reason for keeping Mr Robson and the other ambassadors on retainer was to ensure that a certain number of personal appearances by former players could be guaranteed; and

in the event that Mr Robson accepted every request that was made of him but still failed to satisfy the minimum commitment in any six–month period because the club failed to make 35 requests in the relevant six–month period, then the club would either not have sought to exercise its right under the actual contract – or would have backed down in the event that Mr Robson resisted the exercise of that right – to a contractual remedy for that shortfall. That is because it is implicit in the terms of the actual contract that the club would ask Mr Robson to make at least 35 personal appearances in each six–month period and would not exercise any contractual remedy in respect of a failure by Mr Robson to satisfy the minimum commitment in any six–month period where he accepted every request that was made of him but was offered insufficient opportunities to satisfy that minimum commitment.

Mr Robson had no certainty as to the number of requests that the club would make pursuant to the hypothetical contract;

Mr Robson knew that, if he were to fail to satisfy the minimum commitment in any six–month period by reason of having declined too many requests to make personal appearances, then he would be in breach of the hypothetical contract and MUFC would be entitled to a remedy for that breach; and

therefore, whilst Mr Robson was not subject to any express limitations under the terms of the hypothetical contract as to the number of requests that he was entitled to decline, his freedom under that contract to decline requests was curtailed in practical terms to some extent by the knowledge that he might be in breach of contract if he were to fail to satisfy the minimum commitment in any six–month period by reason of having declined too many requests.

there were no restrictions whatsoever on Mr Robson’s ability to enter into personal endorsement deals (because the restrictions in the actual contract relating to personal endorsement deals were all concerned with protecting the licensed image rights and therefore would not form part of the hypothetical contract); and

in the alternative, if those restrictions should be regarded as being capable of forming part of the hypothetical contract, Mr Robson did not need the consent of MUFC before taking on any personal endorsement deal but was precluded from entering into a personal endorsement deal which:

the club would not generally have sought to exercise its right under the actual contract – or would have backed down in the event that Mr Robson resisted the exercise of that right – to require Mr Robson to obtain the club’s prior consent to each personal endorsement deal; but

except in circumstances where Mr Robson was acting in the course of working for England, the club would have sought to exercise its right under the actual contract – and would not have backed down in the event that Mr Robson resisted the exercise of that right – to prevent Mr Robson from entering into a personal endorsement deal which involved promoting a sponsor’s competitor, particularly where the use of club materials, intellectual property rights or club attire in the course of such promotion might suggest that the club was endorsing the sponsor’s competitor.

in the case of those additional fees for which MUFC was reimbursed by the relevant sponsor, the proper contractual analysis was that the Appellant was contracting directly with the sponsor in question (and not the club) and the club was simply acting as broker or intermediary in that arrangement; and

in the case of those additional fees for which MUFC was not so reimbursed, the proper contractual analysis was that the relevant fees were paid pursuant to a contract or contracts between MUFC and the Appellant that were entirely separate from the Ambassador Agreement and related to personal appearances which were additional to the minimum commitment in any six–month period.

it was up to MUFC to decide whether to put forward to Mr Robson the proposal to make the personal appearance in the first place;

the requests were generally made through the club and it was the club that carried out any negotiations with Mr Robson in relation to the nature of the personal appearance;

the way in which arrangements for the personal appearance were made was generally indistinguishable from the way in which arrangements were made for the personal appearances that formed part of the minimum commitment in each six–month period;

the work which Mr Robson carried out pursuant to the requests was generally indistinguishable from the work which he carried out in making the personal appearances that formed part of the minimum commitment in each six–month period;

Mr Robson had accepted in giving his testimony that he was acting as the club’s ambassador in fulfilling those requests;

MUFC benefited from the additional personal appearances as they served to deepen the club’s relationship with the relevant sponsor; and

when making the additional personal appearance, Mr Robson was accompanied by a representative of MUFC whose role was also to deepen the relationship between the club and the relevant sponsor.

first, on each occasion when the Appellant received an additional fee in return for Mr Robson’s making a personal appearance for a sponsor and the relevant sponsor made a payment to MUFC for the personal appearance,  it was up to MUFC to decide whether to put the proposal to Mr Robson in the first place, it was MUFC and not the relevant sponsor who wrote to Mr Robson to outline the terms and nature of the request and it was MUFC that then negotiated with Mr Robson as to the terms of the arrangement. In effect, as Mr Robson accepted in giving his evidence, there was no difference between the way in which he was engaged to make a personal appearance for a sponsor that fell within the terms of the minimum commitment in a six–month period under the Ambassador Agreement and the way in which he was engaged to make a personal appearance for a sponsor that gave rise to an additional fee to the Appellant;

secondly, Mr Robson accepted that there was no difference between the nature of a personal appearance for a sponsor that fell within the terms of the minimum commitment in a six–month period under the Ambassador Agreement and the nature of a personal appearance for a sponsor that gave rise to an additional fee to the Appellant;

thirdly, Mr Robson accepted that, when he attended the relevant sponsor’s event, he was acting in his capacity as an ambassador for MUFC. He was not doing so as an individual divorced from that capacity;

fourthly, MUFC’s interest in Mr Robson’s personal appearance for the sponsor went some way beyond that of an intermediary. The evidence of Mrs Edge was that Mr Robson’s personal appearance served to deepen the relationship between MUFC and the relevant sponsor, a fact that was reinforced by the presence of a club representative at the event whose role was to do the same. This is more consistent with the club’s playing a role as principal in the process;

fifthly, the club was clearly acting as principal when it arranged for Mr Robson to make a personal appearance for the relevant sponsor pursuant to the relevant sponsor’s rights under its sponsorship agreement. It would make sense for the same contractual structure to persist once the relevant sponsor had exhausted its rights under its sponsorship agreement and still required an additional personal appearance; and

finally, the evidence suggested that Mr Robson was told by the club how much he was being offered to make the personal appearance and had no visibility over the charge that was made by MUFC to the relevant sponsor in return for that personal appearance. If the first analysis were to be correct, one might have expected Mr Robson to have negotiated his fee with the relevant sponsor and then to have agreed a commission with the club. But, instead, he appears to have negotiated his fee with the club and left the club free to negotiate its own fee with the relevant sponsor, at a mark–up.

the very fact that there were multiple ambassadors and legends making a personal appearance for the relevant sponsor tends to support the fact that they were collectively being supplied to the relevant sponsor by the club and that the club was effectively acting as principal in the arrangement; and

Mrs Edge’s evidence was that no such direct payments were ever made to ambassadors, thereby suggesting that, even if there was a direct contract between the relevant sponsor and a legend attending the event, the same was not the case for any ambassador.

first, the deemed contracting parties are the same – namely, MUFC and Mr Robson – and the contracts relate to precisely the same activities conducted in precisely the same manner;

secondly, as far as personal appearances are concerned, the terms of the Ambassador Agreement provided for both the payment of a fixed fee and a “minimum” number of 35 personal appearances in each six–month period. This implies that Mr Robson might make more than the minimum number of personal appearances in a six–month period under the Ambassador Agreement but in return for no additional fees. Since that is self–evidently not what MUFC and the Appellant actually agreed, this suggests to me that the terms of the hypothetical contract to which the Ambassador Agreement gave rise should be taken to have incorporated the terms of the separate actual contract or actual contracts pursuant to which the additional fees were paid, rather than treating that separate actual contract or those separate actual contracts as giving rise to a quite separate hypothetical contract or quite separate hypothetical contracts providing for the payment of the additional fees; and

thirdly, the evidence shows that the personal appearances which gave rise to the additional fees were not simply those that occurred after Mr Robson had fulfilled the minimum commitment in the relevant six–month period. Instead, they were interspersed within the personal appearances that counted toward that minimum commitment. Mr Robson was often offered the chance to make a personal appearance in return for the payment of an additional fee to the Appellant before he had satisfied the minimum commitment for the six–month period in question or even – as in fact happened on at least one occasion – offered the choice between a personal appearance for which an additional fee would be paid to the Appellant or a personal appearance which would count toward the minimum commitment for the six–month period in question. Thus, the terms of the Ambassador Agreement and the other contract or contracts in question appear to me to have given rise to a single seamless and indivisible arrangement under which both MUFC and Mr Robson understood that some of his personal appearances would count toward the minimum commitment for a six–month period and give rise to no additional fee, whilst others would not count toward the minimum commitment for a six–month period and would give rise to an additional fee. In those circumstances, it would be wholly artificial to treat that single seamless and indivisible arrangement as giving rise to more than one hypothetical contract between MUFC and Mr Robson.

the additional fees which were paid to the Appellant by MUFC for Mr Robson’s personal appearances that did not count toward the minimum commitment in any six–month period were all paid pursuant to a contract or contracts between MUFC and the Appellant and that none of them was paid pursuant to a contract or contracts between the Appellant and a sponsor; and

the terms of the hypothetical contract that arose from the Ambassador Agreement in this case included the provisions of that contract or those contracts which related to the additional payments. In short, as Mr Stone aptly put it, the additional payments were being paid for what was “effectively voluntary overtime … under the Ambassador Agreement”.

it specified that, without prejudice to his obligation to satisfy the minimum commitment in each six–month period, Mr Robson was free to decline any request for him to make a personal appearance that was made by the club;

it did not contain any obligation on the part of the club to make sufficient requests for personal appearances to enable Mr Robson to satisfy the minimum commitment in any six–month period despite his declining requests to do so (or to work together reasonably with Mr Robson to enable Mr Robson to satisfy the minimum commitment in any six–month period) although it specified that, if the club failed to request Mr Robson to make personal appearances on at least 35 days in a six–month period, then Mr Robson would not be in breach of the obligation to satisfy the minimum commitment in the relevant six–month period;

it did not contain an obligation on the part of Mr Robson to obtain the prior written consent of the club before entering into any personal endorsement deal but it provided that, except in circumstances where Mr Robson was acting in the course of working for England, Mr Robson was precluded from entering into a personal endorsement deal which involved promoting a sponsor’s competitor, particularly where the use of club materials, intellectual property rights or club attire in the course of such promotion might suggest that the club was endorsing the sponsor’s competitor; and

it contained provisions entitling Mr Robson to receive additional payments for personal appearances for the club or sponsors which were requested by the club outside the terms of the minimum commitment in any six–month period.

there must be mutuality of obligation (which I will call “Stage 3A”);

the putative employer must enjoy a degree of control over the putative employee (which I will call “Stage 3B”); and

the other terms of the contract must be consistent with its being an employment contract (which I will call “Stage 3C”).

there are two aspects to the test at Stage 3A. The first relates to the nature of the putative employer’s obligations and the second relates to the nature of the putative employee’s obligations. Satisfaction of both limbs of the test has been described in some of the authorities as the “wage–work bargain”;

in order for the putative employer limb of Stage 3A to be satisfied, the putative employer must either be obliged under the hypothetical contract to provide work to the putative employee or obliged under the hypothetical contract to pay a retainer to the putative employee – see Clark v. Oxfordshire Health Authority [1998] IRLR 125 at paragraph [41], Usetech Limited v. Young [2004] TC 811 at paragraph [64] and Atholl House CA at paragraph [73].

In this regard, it is important to note the distinction between:

In the former case, the obligation on the part of the putative employer to pay the retainer is sufficient to satisfy the putative employer limb of Stage 3A – see Turner v. Sawdon & Co [1901] 2 KB 653 (CA) – whereas, in the latter case, the absence of the obligation on the part of the putative employer to provide work prevents that from being the case – see Devonauld v. Rosser & Sons [1906] 2 KB 729 and Professional Game Match Officials Limited v. The Commissioners for Her Majesty’s Revenue and Customs [2021] STC 1956 (“PGMOL CA”) at paragraphs [120] to [124]. Sir David Richards highlighted this distinction in Atholl House CA at paragraphs [73] and [74]; and

in order for the putative employee limb of Stage 3A to be satisfied, the putative employee “must be obliged to provide his own work and skill. Freedom to do a job by one’s own hands or by another’s is inconsistent with a contract of service, though a limited or occasional power of delegation may be” – see RMC, as cited in paragraph 166 above.

MUFC was obliged to pay Mr Robson a fixed amount of £150,000 (excluding VAT) every six months; and

Mr Robson was required, inter alia, to satisfy the minimum commitment in each six–month period.

the fact that the hypothetical contract did not oblige the club to provide work is irrelevant because the hypothetical contract obliged the club to pay £150,000 (excluding VAT) every six months in any event – see paragraph 169(2) above; and

the fact that the hypothetical contract allowed Mr Robson to refuse some requests to make personal appearances is irrelevant because the hypothetical contract obliged Mr Robson to satisfy, in person, the minimum commitment in each six–month period – as to which, see paragraph 169(3) above and the EAT in Cotswold at paragraph [55].

in a case where the putative employee has a level of skill which is not susceptible to direction by anyone else in the organisation by whom he or she is engaged, control over the “what” is the most significant aspect of the test – see Atholl House UT at paragraph [93];

in relation to the “what”, the absence of a general right of redeployment in relation to the putative employee is a relevant factor although not determinative in and of itself – see O’Kelly v. Trusthouse Forte plc [1984] 1 QB 90 (O’Kelly”) at 126 and Atholl House UT at paragraphs [97], [102] and [103];

the fact that control over the “what” is the most significant aspect of this test does not mean that control over the “when” and the “where” are of no importance – see Atholl House UT at paragraph [93];

it has long been acknowledged that the test for control over the “how” – which is to say the way in which the work will be carried out and the means to be employed when doing it – is less important than control over the “what, when and where” and that the “how” test should be focused more on ultimate authority than on close direction by actual supervision. That is because there are many examples, of which this is one, where the nature of the work required is such that direct control is necessarily absent – see The Catholic Child Welfare Society and others v. Various Claimants (FC) and The Institute of the Brothers of the Christian Schools and others [2012] UKSC 56 at paragraph [36].

as is the case with the extent of mutuality of obligation, the extent of control exercised by the putative employer over the putative employee is not, by itself, decisive because of the other factors to be taken into account at Stage 3C – see RMC itself, Market Investigations Limited v. Minister for Social Security [1969] 2 QB 173 (“Market Investigations”) at 183 and Atholl House CA at paragraph [82]. In PGMOL at paragraph [33], Lord Richards said that one consequence of not treating mutuality of obligation and control as largely determinative and according only a minor role for other considerations was that “the bar to the existence of control need not be set at an unduly high level”.

a case where A contracted with B for B to provide a boiler meeting certain standards; or

a case where C accepted a speaking engagement for D and D made the hotel and restaurant bookings for the period of his engagement.

to have his vehicle painted in the company’s colours and to wear a uniform prescribed by the putative employer;

to make his vehicle available whenever and wherever required by the putative employer;

to collect and carry such quantity of materials as might be required by the putative employer to the destination specified by the putative employer;

to comply with the putative employer’s rules and regulations;

not to dispose of his vehicle without the putative employer’s prior written consent; and

to operate the vehicle every day apart from two weeks’ holiday each year as agreed by the putative employer.

Mr Rivett said that, since the “what”, “where”, “when” and “how” could be determined only after Mr Robson accepted a particular engagement, which he was not obliged to do, the features of control which existed were consistent with self–employment. The fact that, on one occasion, Mr Robson was given the choice between acting as a host on a match day or attending an event in Philadelphia showed the degree of autonomy which was afforded to him, as did the freedom which was given to him when he was living in Thailand but still acting as an ambassador of the club under the First Personal Ambassador Agreement; and

Mr Stone said that the fact that MUFC could dictate the “what”, “where”, “when” and “how” of the work to be performed was indicative of employment and meant that Stage 3B was satisfied. For example, it was MUFC that determined which personal appearances Mr Robson was requested to make and whether a personal appearance that Mr Robson was requested to make would count toward the minimum commitment in a six–month period or would instead qualify for an additional fee. He rejected the suggestion that the choice offered to Mr Robson between attending a match day or going to an event in Philadelphia indicated that he was in business on his own account and simply agreeing to go to the event in Philadelphia in the course of carrying on that business. Instead, that choice was entirely consistent with his being under the control of the club. Mr Robson had been offered the choice only because the club was happy for him to do either event and willing to give him the choice.

it is important not “to focus unduly on the issues of mutuality of obligation and control and to treat all other terms of the contract and the surrounding circumstances of the parties’ relationship as of less significance”. However, “[it] is not the case that once the pre–conditions of mutuality of obligation and control are satisfied, they drop out of the picture as relevant factors in the overall assessment of whether a contract of employment exists” – see Lord Richards in PGMOL at paragraphs [30] and [32];

there has historically been some debate as to whether, once each of Stage 3A and Stage 3B has been satisfied, there has to be a clear inconsistency in the other terms of the contract to displace the conclusion of employment or whether Stage 3C should be approached on the basis that the other terms of the contract need to be consistent with employment in order to reach the conclusion of employment. However, in Atholl House CA at paragraph [75], Sir David Richards (as he then was) said as follows:

“Whether the third condition is one of consistency or inconsistency with a conclusion of employment strikes me as a largely arid debate. The court or tribunal will in any event have to analyse the terms of the contract and reach a conclusion whether they are consistent or inconsistent with a relationship of employment. Given that mutuality of obligation and control are necessary elements of employment, there will inevitably have to be factors pointing in the opposite direction, but it is, in my view, no more than that.”

It follows that, when it comes to Stage 3C, the mere fact that Stage 3A and Stage 3B have been satisfied at the point when Stage 3C is being addressed does not mean that there should be a presumption of employment at the point when the various factors are being considered. The position should be approached without any presumption either way – see Atholl House CA at paragraph [75];

nevertheless, the absence of any presumption either way does not mean that the court must address Stage 3C in a vacuum. The express or implied terms of the relevant contract are central to the enquiry and necessarily the starting point in that enquiry but the factors to which the court or tribunal is to have regard “are not confined only to the terms of the [relevant] contract and the effects of those terms” (see Atholl House CA at paragraph [61]). What is needed is a consideration of “the relationship between the parties recorded in the agreement in the setting of the surrounding circumstances” – see Troutbeck at paragraph [41] and also Atholl House CA at paragraphs [122] and [130].

In Barnes at paragraph [60], the UT approved of the statement that had been made by the FTT in that case that “[the] focus at the third stage remains anchored to the contract in issue, but the angle of focus widens out to take in the context and circumstances in which the contractual relationship is created; the direction of perspective is to zoom out from the contract in issue” and, in paragraph [112], it held that the FTT had erred in law in failing to follow its own self–direction by focusing excessively on the circumstances in which the hypothetical contract had operated in practice at the expense of focusing on the terms of the hypothetical contract itself; and

in approaching this issue:

financial risk – the degree of financial risk which is undertaken by the putative employee is a relevant factor. The taking of financial risk is an indication of self–employment. In Barnes, the UT held that the limited financial risk taken by Mr Barnes in performing the engagement was an indication of employment – see Barnes at paragraph [117(5)]. However, “financial risk” does not include the risk of not being able to find alternative employment as that is a risk shared by all casual employees. To be a factor pointing towards independent contractor status, the risk needs to be an ability to make a loss or a profit from how the work is performed – see Global Plant Limited v. Secretary of State for Social Security [1972] 1 QB 139 at 152 and Lee Ting Sang v. Chung Chi-Keung [1990] 2 AC 374 (“Lee Ting Sang”) at 384;

financial dependence – the extent to which the putative employee is dependent upon, or independent of, the putative employer for the financial exploitation of his or her talents is a relevant factor. The putative employee’s ability to exploit his or her talents in the wider market and economic independence from any one paymaster is an indication of self–employment – see Hall at 218C, Atholl House UT at paragraph [113] to [115] and RWG, at paragraph [112].

In Barnes at paragraphs [95] to [98], the UT noted that, whilst financial dependence is a relevant factor as a matter of principle, “‘financial dependency’ is a somewhat elastic concept” and it went on to hold that the FTT in that case had been entitled to conclude that, even though Mr Barnes derived 60% of his income from Sky, the substantial demand for his services during the period in question meant that he was not financially dependent on Sky;

time commitment – the time commitment which the engagement involves is a relevant factor. An engagement which does not require the putative employee to spend a significant part of his or her working time on the engagement is more likely to be one entered into in the course of self–employment – see Atholl House UT at paragraph [113] to [115] and Atholl House CA at paragraph [130]. However, the putative employee’s opportunity to profit from an efficient use of time in his or her overall business is a neutral factor as it sheds no light on whether, in all the circumstances, the hypothetical contract would have been an employment contract – see Barnes at paragraphs [89] to [91];

other engagements – the manner in which the putative employee generally carries out his or her working life is an important contextual circumstance to be taken into account in determining whether he or she should be regarded as an employee in relation to the particular engagement in question. The fact that the putative employee’s working life generally involves entering into a series of engagements in the course of self–employment is a factor which points toward self–employment – see Barnes at paragraphs [85] to [88]. However:

nature of activities – whether or not the putative employee performs similar services for others as an independent contractor “is a relevant fact, if known or reasonably available to the putative employer”. The fact that the putative employee performs similar services for others as an independent contractor is a factor which points toward self–employment. However, “it goes no further than that”. It is wrong to assume that, because the services performed by the putative employee as an independent contractor are similar to those performed by the putative employee under the engagement being considered, the putative employee must have been performing the services under the engagement being considered as an independent contractor – see Davies v. Braithwaite [1931] 2 KB 628 (“Davies”) at 635, Fall at 295H and 298F, Sidey v. Phillips [1987] STC 87 (“Sidey”) at 90-91 and Atholl House CA at paragraphs [128], [129] and [171];

ownership of equipment – whether or not the putative employee uses his or her own equipment to perform the services is a relevant factor. The use of the putative employee’s own equipment is a factor which points towards self–employment – see Market Investigations at 184 -185 and Fall at 293;

length of relationship – the degree of continuity in the relationship between the putative employer and the putative employee is a relevant factor to be taken into account. An engagement which is short–term and where there is no obligation on the part of the putative employer to find something else for the putative employee to do after the putative employee has completed the allotted task is more likely to involve self–employment. In contrast, a long–term engagement, with the security that that entails, is more consistent with employment – see Kickabout Productions Limited v. The Commissioners for Her Majesty’s Revenue and Customs [2022] EWCA Civ 502 (“Kickabout CA”) at paragraph [94] and Barnes at paragraphs [117(1)] and [121(2)];

the “part and parcel” test – the question of whether the putative employee can accurately be described as being “part and parcel” of the putative employer’s organisation can be a relevant factor depending on the context – see RMC at 524B, Lee Ting Sang at 388, Hall v Lorimer [1992] STC 599 (in the High Court) at 612g and Kickabout CA at paragraphs [98] to [101].

The test will not be relevant in all cases. In The Commissioners for Her Majesty’s Revenue and Customs v. Kickabout Productions Limited [2020] UKUT 216 (TCC) (“Kickabout UT”), the UT had held that it did not think that “in the circumstances of this case, an impressionistic analysis of whether [the presenter] was “part and parcel” of Talksport’s organisation would weigh heavily in the balance” and that such an analysis would “[add] little in this case” – see Kickabout UT at paragraph [95] – and the CA in Kickabout CA concluded that “[there] is no criticism that can properly be made of this analysis” – see paragraph [101].

However, the CA in Kickabout CA observed that, “[on] the particular facts of some cases, a decision–making court or tribunal may reasonably consider that it is a useful question to ask as part of the overall assessment” – see Kickabout CA at paragraphs [98] to [101] – and the UT in Kickabout UT accepted that, in some cases, “analysis whether someone is “part and parcel” of an organisation will be illuminating” – see Kickabout UT at paragraph [95].

The Privy Council in Lee Ting Sang held that there were two distinct strands in relation to this test.

The first of them relates to whether specified activities of the putative employee can be said to be integral to the activities of the putative employer or merely accessory to those activities – see Lee Ting Sang at 386 and 387– whilst the second of them relates to the quite different question of whether the putative employee can be said to be “part and parcel” of the putative employer in an organisational sense – see Lee Ting Sang at 387 and 388. The second strand, based on the dictum of Denning LJ in Bank voor Handel en Scheepvaart N.V. v. Slatford [1953] 1 Q.B. 248 at 295, was the one mentioned by MacKenna J in RMC at 524.

In Lee Ting Sang, the Privy Council in fact determined that neither of the two strands had any relevance on the facts of that case and that reliance on them had led the lower courts into error – see Lee Ting Sang at 388. However, that is not to say that either or both of those strands may not be relevant on the facts of another case;

intellectual property rights – an ability on the part of the putative employee to exploit, in the course of other engagements, the work product that he or she has created in the course of the hypothetical contract is, in principle, a relevant factor and an indication of self–employment – see Barnes at paragraphs [74] to [77] and [118(1)];

co–operative working relationship – whilst the mere existence of a co–operative working relationship is a neutral factor, a co–operative working arrangement in relation to the availability of the putative employee to carry out the work and the circumstances in which the putative employer will ask the putative employee to do so is “a pointer away from employment, in particular as it goes to the extent of control, which is a relevant circumstance at [Stage 3C]” – see Barnes at paragraphs [78] to [81];

mutuality of obligation and control – as both Sir David Richards and Arnold LJ noted in Atholl House CA at paragraphs [76], [113] and [169], in addressing Stage 3C in each case, the relevant court or tribunal must not entirely divorce its evaluation of the relevant factors from the conclusions which it reaches in relation to Stage 3A and Stage 3B. Thus, even though it is axiomatic that, in reaching this stage, each of Stage 3A and Stage 3B will already have been satisfied, the extent of the mutuality of obligation and the extent of the control are relevant factors to be considered at Stage 3C.

In particular, when the evaluation for the purposes of Stage 3C is made, the fact that the putative employee is required to perform the services personally and cannot provide a substitute is a factor which points to employment status – see, for example, Barnes at paragraph [117(2)] – and the extent of the putative employer’s control needs to be borne in mind in considering the putative employee’s status – see, for example, Augustine v. Econnect Cars Ltd [2019] UKEAT 0231/18 (20 December 2019) (“Augustine”) at paragraph [66].

The existence of a right of “first call” on the putative employee’s time (which goes to the “where” and the “when” of the putative employee’s activities under the engagement in question and is therefore part of the control test at Stage 3B) is a factor which points toward employment. In Barnes, the UT held that Sky’s right of “first call” on Mr Barnes’s services for a significant portion of each year was an indicator of Mr Barnes’s employment status but that Mr Barnes’s considerable latitude in stating his availability to fulfil that requirement was an indicator of his self–employment status – see Barnes at paragraphs [117(3)] and [118(2)];

control over other engagements – except to the extent that it involves a right of “first call” (and therefore goes to the “where” and the “when” of the putative employee’s activities under the engagement in question), the issue of control over the extent of the putative employee’s other engagements is not a matter which is relevant to Stage 3B. That is because it does not relate to any of the “what”, “where”, “when” or “how” of the putative employee’s engagement. However, it is a factor to be taken into account at Stage 3C.

In Barnes, the UT held that the fact that Sky had the exclusive right to Mr Barnes’s services in the UK, that Mr Barnes could not provide his services to another broadcaster or radio or media organisation without Sky’s written consent (not to be unreasonably withheld) and that Mr Barnes would need Sky’s permission before engaging in any new commercial activities was an indicator of Mr Barnes’s employment status – see Barnes at paragraph [117(4)];

employee benefits – in the context of the hypothetical contract which is required to be constructed for the purposes of applying the IR35 legislation, the fact that the actual contractual arrangements involve two companies (the client and the intermediary) rather than a company (the client) and an individual (the worker) and therefore make no provision for holiday or sick pay, maternity leave or a pension entitlement should not be regarded as a significant factor in determining whether the hypothetical contract is an employment contract but it is not entirely irrelevant – see Atholl House UT at paragraph [74], Kickabout CA at paragraph [97] and RWG at paragraphs [125] and [126];

contractual statements – whilst the understanding and intentions of the parties are relevant factors, “statements by the parties disavowing any intention to create a relationship of employment cannot prevail over the true legal effect of the agreement between them”. In a borderline case, such statements “may be taken into account and may help to tip the balance one way or the other” but, in the majority of cases, they “will be of little, if any assistance in characterising the relationship between them” – see Dragonfly at paragraphs [53] to [55], Kickabout CA at paragraph [95] and RWG at paragraphs [122] to [124]. In Barnes, the UT, having concluded that the case was not a borderline one, declined to take into account whether the hypothetical contract would have included such a provision – see Barnes at paragraph [124];

fixed fees – the payment of a fixed fee irrespective of the number of days worked is a neutral factor as it is consistent with both employment status and self–employment status – see Barnes at paragraphs [71] to [73]; and

reputational risk – the fact that the work carried out by the putative employee involves putting his or her reputation at risk is consistent with both employment status and self–employment status and is therefore not a relevant factor – see Barnes at paragraphs [92] to [94].

the indefinite nature of the hypothetical contract in this case was indicative of an employment relationship – see Kickabout CA at paragraph [94] and Barnes at paragraph [117(1)]; and

unless the position was finely–balanced, which neither party considered it to be in this case, minimal weight should be given to the statement in the hypothetical contract to the effect that it did not give rise to an employment relationship – see Dragonfly at paragraphs [53] to [55].

indicative of employment;

indicative of self–employment; or

neutral or of marginal relevance either way.

the length of the relationship between MUFC and Mr Robson – Mr Stone said that the fact that, at the time when the hypothetical contract arose, Mr Robson had been an ambassador since 2008 and had had a long relationship with the club prior to that date was indicative of an employment relationship – see Kickabout CA at paragraph [94] and Barnes at paragraph [121(2)]. The extent of the attachment between the club and Mr Robson made their relationship more likely to be one of employment.

Mr Rivett said that Mr Robson’s association with MUFC was not a function of his ambassadorial role but instead a function of his history as a player for the club. This causation aspect was critical because the same association between Mr Robson and the club would have existed even if he had never been appointed as an ambassador and the hypothetical contract had never arisen. As such, it was not a relevant factor to be taken into account in determining the nature of the relationship under the hypothetical contract;

mutuality of obligation – it was common ground that the decisions in PGMOL and Atholl House CA showed that the extent of the mutuality of obligation was a material factor to be considered when carrying out the exercise required by Stage 3C. In Barnes, the fact that Mr Barnes could not provide a substitute to perform the relevant services was held to be an indication of an employment relationship – see Barnes at paragraph [117(2)].

However, there was a dispute between the parties as to the extent of the mutuality of obligation in this case.

Mr Rivett submitted that the mutuality of obligation under the hypothetical contract was “of a thin amount”, as he put it, because, under the terms of the hypothetical contract:

He said that these were features that tended to diminish the mutuality of obligation and would generally not be a feature of an employment contract.

In response, Mr Stone said that:

Mr Stone added that the fact that Mr Robson was precluded by the terms of the hypothetical contract from providing a substitute to provide the relevant services was indicative of the strength of the mutuality of obligation in this case.

Mr Rivett said that that was not the case – the inability to provide a substitute was a neutral factor given that the very nature of the ambassadorial role which Mr Robson was required to perform necessarily entailed making personal appearances himself. It was simply a function of the nature of the services to be provided under the engagement because it was of the very essence of a contract that required personal appearances to be made that the obligation to make those personal appearances could not be delegated.

Mr Stone said that just because the nature of the services to be supplied inevitably precluded Mr Robson from providing a substitute did not mean that that inability was neutral or could somehow be disregarded in this context. Instead, it served to reinforce the fact that personal service was of the essence of the hypothetical contract and thus to strengthen the conclusion that the hypothetical contract was an employment contract;

control – similarly, it was common ground that the decisions in PGMOL and Atholl House CA showed that the extent of the club’s control was a material factor to be considered when carrying out the exercise required by Stage 3C.

However, there was a dispute between the parties as to the extent of the club’s control in this case.

Mr Stone said that Mr Robson was obliged to satisfy the minimum commitment in each six–month period and thus could not refuse requests to make personal appearances indefinitely, with the result that the club could ultimately dictate the “what”, “where”, and “when” of the work to be performed. Taken together with the framework of control which was exercised by the club when the personal appearances were made – which entailed control over the “how” the work was performed – there was a high degree of control in this case, which was consistent with employment.

Mr Rivett said that, since the “what”, “where”, “when” and “how” could be determined only after Mr Robson accepted a particular engagement, which he was always free to decline, the level of control was weak, which was consistent with self–employment.

Mr Rivett added that the fact that the hypothetical contract contained:

were all indicative of weak control and therefore indicative of self–employment. In that regard, it was instructive to contrast the lack of such provisions in this case with the extensive disciplinary provisions which existed in relation to the referees in PGMOL.

Mr Stone said that the absence of those features was not inconsistent with an employment relationship, as Ackroyd had shown. Moreover, the right to terminate the hypothetical contract for breach was an effective sanction and entirely consistent with strong control;

absence of financial risk – Mr Stone said that the fact that:

meant that Mr Robson enjoyed both certainty of payment and an absence of any financial risk and this was indicative of employment. In Barnes, the fact that Mr Barnes received a fixed fee regardless of the number of days that he worked and that Sky provided all the necessary equipment and discharged all the travel and accommodation costs meant that Mr Barnes was exposed to limited financial risk and this was held to be an indication of an employment relationship – see Barnes at paragraph [117(5)].

Mr Rivett said that, whilst this might point toward employment, it was not a very compelling point because many contracts for services also made provision for the reimbursement of expenses;

restrictions on other engagements – Mr Stone said that the restrictions placed on Mr Robson’s ability to enter into personal endorsement deals were indicative of employment. In Barnes, Mr Barnes was precluded from providing his services to another broadcaster or radio or media organisation without Sky’s consent (such consent’s not to be unreasonably withheld) and was required to seek permission from Sky before engaging in any new commercial activities and these were held to be indicative of an employment relationship – see Barnes at paragraph [117(4)].

Mr Rivett said that the fact that Mr Robson did not need the club’s prior consent before entering into personal endorsement deals and that the restrictions on his doing so applied to only limited categories of personal endorsement deals were indicative of self–employment. He added that the work done for MUFC heightened Mr Robson’s public profile and allowed him to build relationships with other potential clients in order to develop his business. The contracts with the sponsors were an example of that. This was indicative of self–employment.

Mr Stone said that the suggestion that Mr Robson’s activities for the club enabled him to develop his relationship with the sponsors as an individual and separate from his role as ambassador was obviously incorrect. The evidence showed that, when Mr Robson received additional payments for making personal appearances for sponsors, he was doing so in his role as an ambassador for the club and those personal appearances were no different from the ones that counted toward the minimum commitment in each six–month period;

financial dependence on MUFC – Mr Stone said that the fact that Mr Robson was financially dependent on MUFC was indicative of employment. In Barnes at paragraph [121(3)], the UT had noted that a putative employee’s financial dependence on the putative employer generally pointed toward an employment relationship. Mr Stone explained that “financial dependence” in this context did not mean that the putative employee needed to be dependent on income from the putative employer in order to make ends meet. The fact that the putative employee might be of sufficient means not to need the relevant income did not mean that there was no “financial dependence”. Instead, the critical issue was whether the putative employee was dependent on the putative employer for the exploitation of his or her talents. That was manifestly the case in the present proceedings given the extent to which the income of the Appellant derived from the club.

Mr Rivett said that Mr Robson was not financially dependent on the club simply because the majority of the Appellant’s income derived from the club. That was because those circumstances had arisen as a result of Mr Robson’s personal choice. Following his recovery from illness in 2011, Mr Robson had decided to spend more time with his friends and family and to pursue his hobbies but that did not mean that there was no demand for his services. Thus, he was not dependent on the club for the exploitation of his talents;

the “part and parcel” test – Mr Stone said that Mr Robson’s decision to engage almost exclusively with the club and the sponsors by virtue of the hypothetical contract was indicative of employment because it meant that he was “part and parcel” of the club. He was making his personal appearances as a representative of the club dressed in club apparel and doing the work of deepening the club’s relationship with the sponsors and fans. He was one of a handful of ambassadors who were the name and face of MUFC. Although he had no responsibility within the hierarchy of the club for the relationship with the sponsors and fans, he was key to the deepening of that relationship and his role was in no way ancillary to that process. If he had wanted a smaller commitment to the club, he could have agreed to act as a legend instead of an ambassador. In that case, he would not have been subject to the degree of commitment and the restrictions contained in the hypothetical contract. But he had chosen not to do that.

Mr Rivett pointed out that the fact that the club told the sponsors that Mr Robson was not an employee and could not be compelled to make a personal appearance on request demonstrated that Mr Robson was not “part and parcel” of the club in an organisational sense. Mr Robson was his own agent who could decide for himself which personal appearances he wished to make;

the image rights licence – Mr Stone said that the inclusion in the hypothetical contract of the exclusive image rights licence was indicative of employment. This was because it meant that Mr Robson was giving up control to the club of his image rights as opposed to saying to the club that he was happy to perform services but wanted to retain the ability to exploit his own image rights for the purposes of his own business.

Effectively, as Mr Stone put it, Mr Robson was “going all in with [MUFC]” and agreeing both personally to perform services and to give the club exclusive use of his image rights. This contrasted with the position of Mr Barnes, who had retained the right to reproduce elsewhere the opinions which he had given during a live broadcast for Sky, a fact which the UT in Barnes saw as being indicative of self–employment – see Barnes at paragraphs [77] and [118(1)].

Mr Rivett said that the provisions in the Ambassador Agreement in relation to the licensed image rights did not form part of the hypothetical contract for the reasons he had outlined in dealing with the Image Rights Issue – see paragraphs 108 to 121 above – and therefore they could not be taken into account in determining the nature of the relationship between the club and Mr Robson at Stage 3C;

the nature of the Appellant – Mr Rivett said that the longevity of the Appellant as a separate company and the variety of engagements performed by Mr Robson on behalf of the Appellant other than for MUFC or the sponsors were indicative of self–employment because it meant that there was spectrum and depth to the business carried on by the Appellant which did not exist in those cases under the IR35 legislation where a personal services company had been established with recent provenance;

absence of “first call” – Mr Rivett said that the fact that there was no right of “first call” in the hypothetical contract – which is to say no provision to the effect that MUFC work would take priority over Mr Robson’s other work – was indicative of self–employment.

Mr Stone said that a lack of an express provision in the hypothetical contract which conferred priority on the club was not inconsistent with an employment relationship if the terms of Mr Robson’s engagement by the club, taken together with the terms of his other engagements, were such that, in practice, his work for the club would take priority;

time commitment – Mr Rivett said that the fact that Mr Robson’s obligations under the hypothetical agreement would have required a minimal time commitment was indicative of self–employment. In contrast to, say, the newsreaders and presenters who had previously been the subject of challenges under the IR35 legislation, Mr Robson had plenty of time to do other things. Moreover, a lot of his personal appearances under the hypothetical contract involved attending matches which he would have attended in any event even if he had not been engaged as an ambassador.

Mr Stone said that a minimal time commitment was not by itself inconsistent with employment. He pointed to the decision of the UT in RWG where the IR35 legislation was held to apply despite the fact that the taxpayer, the broadcaster Eamonn Holmes, only worked for between 45 and 92 weekdays per year over the relevant period, with 21 or 22 weekend links in one of the tax years during the relevant period. He also noted that a student who held a part–time Saturday job clearly had a relationship of employment with his or her putative employer despite the minimal time commitment that that involved; and

impact of the pandemic – finally, Mr Rivett said that it was important to bear in mind the relevance of the pandemic when conducting the present exercise. It had meant that the usual sorts of activities in which Mr Robson might have engaged outside of his ambassadorial role for the club, such as after–dinner speaking, were closed off and inevitably led to a reduction in the income arising to the Appellant from sources other than MUFC or the sponsors.

Mr Stone pointed out that the Appellant’s income statements for the tax year ending 5 April 2017 and the two following tax years suggested that Mr Robson had carried out very few engagements for people other than MUFC and the sponsors for a considerable period of time before the pandemic. As such, the pandemic had had no impact on Mr Robson’s working life as a whole.

Mr Stone submitted that, stepping back and looking at the actual contract and the circumstances in which the actual contract was executed as a whole, the nature of the relationship between the club and Mr Robson, the way in which Mr Robson was required to provide his services and the extent to which the income realised by Mr Robson from the provision of his services was provided by the club all pointed in the direction of an employment relationship; and

Mr Rivett submitted that, stepping back and looking at the actual contract and the circumstances in which the actual contract was executed as a whole, if I did not agree with him that the IR35 legislation was not engaged at all because the actual contract was essentially a contract for the licence of image rights and any services for which it provided were simply ancillary to that licence, then the conspicuous absence of control over the way that the Appellant discharged its obligation to procure the performance of Mr Robson’s services under the actual contract, taken together with Mr Robson’s freedom to pursue his other engagements, all pointed in the direction of self–employment.

the terms of the hypothetical contract are central to the enquiry and necessarily the starting point in the enquiry but are not determinative in and of themselves. What is needed is a consideration of “the relationship between the parties recorded in the agreement in the setting of the surrounding circumstances” – see Troutbeck at paragraph [41] and also Atholl House CA at paragraphs [122] and [130];

it is necessary to take into account relevant factors and to disregard irrelevant factors and to divide those terms of the hypothetical contract and the surrounding circumstances which are relevant between those which are consistent with employment, those which are not (and instead point toward self–employment) and those which are neutral – see Barnes at paragraph [108(3)]; and

this must not be carried out as a mechanical exercise simply involving the enumeration of the various factors. Instead, it is necessary to paint a picture from an accumulation of detail and then to stand back to make an informed qualitative assessment from a distance – see Market Investigations at 184 and Hall at 216.

strong mutuality of obligation – I agree with Mr Stone that, far from diminishing the extent of the mutuality of obligation, the fact that Mr Robson could be required under the hypothetical contract to make his personal appearances “for any purpose required by [the club]” is something which points in favour of a strong mutuality of obligation because it emphasises the extreme width of the activities which the club could require Mr Robson to perform.

I also do not see why the mere fact that the nature of the service to be provided under the hypothetical contract – which is to say making personal appearances – made the provision of a substitute impossible should be seen as a neutral factor or should be disregarded in assessing the strength of the mutuality of obligation in this case. On the contrary, I agree with Mr Stone that the fact that Mr Robson was the only person who could satisfy the relevant obligation to make personal appearances tends to emphasise the strength of the mutuality of obligation. In the phraseology of MacKenna J in RMC, Mr Robson was obliged to provide his own work and skill and had no freedom to do the job by another’s hands – see Barnes at paragraph [117(2)].

I therefore consider that, notwithstanding the point made in paragraph 207(1) below, the mutuality of obligation in this case was strong and that Mr Robson’s personal service was part of the essence of the hypothetical contract;

strong control – I agree with Mr Stone that the terms of the hypothetical contract entitled the club to control the “what”, “when”, “where” and “how” of the services to be provided by Mr Robson.

Notwithstanding the point made in paragraph 207(2) below, Mr Robson could not continually refuse requests to make personal appearances indefinitely. If he was to satisfy the minimum commitment in each six–month period under the hypothetical contract, he would, sooner or later, have to accede to the club’s requests to make personal appearances and, in so doing, he would be accepting the club’s control of the “what”, “when” and “where” of the services in question.

Moreover, in making a personal appearance following any such acceptance, Mr Robson would be acting under a framework of control exercised by the club so that the club had control over the “how”. For the same reasons as I have given in dealing with this point in the context of Stage 3B at paragraphs 189 to 193 above, the framework of control was not diminished by the fact that the hypothetical contract allowed Mr Robson some autonomy and flexibility in the manner in which he performed his obligations;

the indefinite term of the hypothetical contract – the hypothetical contract provided that it would continue indefinitely unless terminated by either party. As such, it provided security for Mr Robson in his role – see Kickabout CA at paragraph [94] and Barnes at paragraph [117(1)];

absence of financial risk – the hypothetical contract provided for the payment of a fixed fee for each six–month period, come what may, and for MUFC to be responsible for arranging and paying for Mr Robson’s travel and accommodation and meeting Mr Robson’s other reasonable expenses. These obligations meant that Mr Robson was not exposed to any financial risk in connection with his activities under the hypothetical contract – see Barnes at paragraph [117(5)];

the image rights licence – by granting the club the exclusive right to use his image during the term of the hypothetical contract, Mr Robson gave up the ability to exploit his image rights for the purposes of his own business in general. This contrasts with the position of Mr Barnes in Barnes – see Barnes at paragraphs [74] to [77] and [118(1)] – and is inconsistent with self–employment; and

apparel – the hypothetical contract required Mr Robson to wear club apparel on most of his engagements. This emphasised his connection with, and importance to, the club and thus signalled the fact that he was “part and parcel” of the club. In addition, it meant that he was not using his own equipment in providing his services, and the use of equipment provided by the putative employer has in the past been associated with self–employment – see Market Investigations at 184–185 and Fall at 293.

limitation on mutuality of obligation – as long as he satisfied the minimum commitment in each six–month period, Mr Robson was entitled to refuse requests to make personal appearances. This flexibility is unusual in a relationship of employment and is a factor which served to diminish to some extent the mutuality of obligation in this case;

limitation on control – similarly, Mr Robson’s ability to refuse requests to make personal appearances, albeit subject to his obligation to satisfy the minimum commitment in each six–month period, served to diminish to some extent the club’s control over the “what”, “when” and “where” of his activities. This is because, as noted by the UT in Barnes at paragraphs [78] to [81], a working agreement as to the putative employee’s availability to perform the services goes beyond the mere existence of a co–operative working relationship and is, “as a matter of principle, a pointer away from employment”.

A further limitation on the club’s control over Mr Robson was the absence of terms in the hypothetical contract relating to training, guidelines, policies or procedures and formal reviews or sanctions for breach of contract apart from the right to terminate the hypothetical contract. In PGMOL, the referees were subject to an assessment and coaching system which both the CA and the SC considered to be relevant to the extent of control in that case – see PGMOL at paragraphs [84] to [88]; and

absence of a right of “first call” and limited restrictions on personal endorsement deals – the fact that the hypothetical contract did not contain provisions giving the club the right of “first call”, did not require Mr Robson to obtain the club’s prior consent to each personal endorsement deal and contained only limited restrictions on Mr Robson’s ability to enter into personal endorsement deals meant that Mr Robson was largely free to carry on business on his own account should he so wish. This freedom is generally indicative of self–employment and differs from the more extensive control over Mr Barnes’s other engagements in Barnes which were regarded as an indicator of his employment status – see Barnes at paragraph [117(4)].

the fees – even if the hypothetical contract had provided for the payment of fixed fees regardless of the number of days that Mr Robson worked, I would have seen that as a neutral factor in determining this question, as it was in Barnes – see Barnes at paragraph [73]. However, in fact, I have concluded in dealing with Stage 2 that the hypothetical contract did not say that. Instead, it required Mr Robson to satisfy the minimum commitment in each six–month period in return for the fixed fee for that six–month period and then provided for Mr Robson to receive additional fees for making personal appearances above the minimum commitment for the relevant six–month period. I do not see that the fee structure under the hypothetical contract, as so described, sheds any light on the issue which I am addressing;

absence of terms conferring employee benefits – the absence of terms conferring employee benefits in the hypothetical contract is not entirely irrelevant but is not a significant factor in this process and therefore I have not accorded it much weight. The same approach was adopted by the UT in Atholl House UT at paragraph [74] and RWG at paragraphs [125] and [126] and by the CA in Kickabout CA at paragraph [97]; and

statement in the hypothetical contract to the effect that the hypothetical contract was not intended to give rise to a relationship of employment – since I do not consider this to be a borderline case, for the reasons articulated in paragraphs 220 and 221 below, I see this statement as being of little assistance in characterising the relationship which existed under the hypothetical contract – see Dragonfly at paragraphs [53] to [55], Kickabout CA at paragraph [95] and RWG at paragraphs [122] to [124].

the obligation under the hypothetical contract to satisfy the minimum commitment in each six–month period substantially negated the impact of that flexibility. It meant that Mr Robson could not decline requests for personal appearances indefinitely and therefore that mutuality of obligation and control were still present to a considerable extent;

whilst:

it is apparent from the decision of the EAT in Cotswold that an ability on the part of the putative employee to refuse some work does not, of itself, negate the existence of an employment relationship;

in fact, the decisions of:

went further than the EAT in Cotswold in holding that there was an employment relationship despite the ability of the putative employees in those cases to arrange their own hours of work, their holidays and the amount of work they did; and

there is some equivalence between Mr Robson’s freedom to decline particular requests and the absence of day–to–day control of a property’s caretakers by the property owner in Troutbeck and the latter did not prevent the EAT in that case from concluding that the caretakers were employed.

the absence of terms in the hypothetical contract relating to training, guidelines, policies or procedures and formal reviews; or

the absence of sanctions for breach of the hypothetical contract apart from termination

the length of the relationship between the club and Mr Robson – whilst it is true that Mr Robson’s association with the club preceded his ambassadorial role, it is nevertheless the case that, at the time when the hypothetical contract arose, Mr Robson had been acting as an ambassador for over ten years and that was an important part of the context in which the hypothetical contract arose.

Moreover, I am not persuaded that the fact that the relationship originated in Mr Robson’s playing career with the club – as opposed to his ambassadorial role – and would have existed even in the absence of that role prevents this from being a factor which is indicative of an employment relationship. All that matters in this context is the strength and duration of the relationship and not its cause. I therefore agree with Mr Stone that this is an indication that the relationship was one of employment – see Kickabout CA at paragraph [94] and Barnes at paragraph [121(2)]; and

the “part and parcel” test – the services provided by Mr Robson were demonstrably integral – and not simply accessory – to the business of the club. This is because those services were key to the deepening of the relationship between the club and the sponsors and fans. As such, Mr Robson was “part and parcel” of the club in the first sense of the phrase addressed in Lee Ting Sang at 386 and 387.

In addition, even though Mr Robson was not responsible within the hierarchy of the club for the relationship between the club and the sponsors and fans, and had some flexibility in relation to which particular personal appearances he undertook, with the result that the club had to make it clear to sponsors that any specific request for his personal appearance could not be guaranteed, when he did make a personal appearance, he was presented to the sponsors and fans as a representative of the club and was dressed in club apparel. As such, I think it is also the case that Mr Robson was “part and parcel” of the club in an organisational sense, which is the second sense of the phrase addressed in Lee Ting Sang – see Lee Ting Sang at 387 and 388.

Although the authorities show that the “part and parcel” test will not be relevant in all cases, both the UT in Kickabout UT and the CA in Kickabout CA held that there were cases where it might well be illuminating and a useful question to ask. I consider that this is one of those cases because of the significance to the club of Mr Robson’s role in attracting and retaining sponsors and fans.

minimal time commitment – the fact that, at the time when the hypothetical contract arose, it was known to the parties from their experiences over the preceding ten years that Mr Robson’s activities as an ambassador would involve a minimal time commitment. This meant that each party to the hypothetical contract knew that Mr Robson would be free to pursue other activities should he wish to do so; and

the long–standing nature of the Appellant –at the time when the hypothetical contract arose, the Appellant was of long–standing and had not been recently created. Both the club and Mr Robson knew that the Appellant was the entity pursuant to which Mr Robson pursued his commercial interests in general and that that had been the case for a considerable number of years.

Although it is true that it was Mr Robson himself and not the Appellant who was party to the Personal Ambassador Agreements with the club, and no compelling explanation for that has been provided, the fact that the club was aware that the Appellant played that role was implicitly acknowledged by:

The fact that the club was aware that the Appellant was the mechanism pursuant to which Mr Robson pursued his commercial interests in general is a feature of the attendant circumstances which is indicative of self–employment.

financial dependence on MUFC – although the absence of meaningful restrictions on Mr Robson’s other activities meant that he was free to carry on business on his own account, he had chosen to let most of his other work fall away by the time when the hypothetical contract arose. As such, by that time (and during the tax years which are relevant to this decision), he derived almost all of his income from the club through his personal appearances for the club and the sponsors. The authorities suggest that this level of financial dependence on the club is indicative of an employment relationship – see Hall at 218C, Atholl House UT at paragraph [113] to [115] and RWG, at paragraph [112].

In saying that, I am not inclined to give any weight to the fact that, by virtue of the pandemic, the opportunities for Mr Robson to pursue other activities during a large part of period after the hypothetical contract arose would have been heavily circumscribed.

That is for two reasons.

First, the CA in Atholl House CA held that only facts which were known by, or were reasonably available to, both parties at the time when the hypothetical contract arose may be taken into account in this context – see Atholl House CA at paragraphs [123], [131], [164], [170] and [171]. In this case, the hypothetical contract arose on 3 December 2019, when the Ambassador Agreement was executed, and no evidence has been presented to me to suggest that, on that date, the fact that the pandemic was only a few months away was known by, or reasonably available to, either party.

Secondly, even if the imminent pandemic had been a circumstance which should be taken into account in this context, the evidence showed that the pandemic was not the reason why Mr Robson carried out very few engagements for people other than MUFC and the sponsors in the tax years which are relevant to this decision. That was his working profile for a considerable period of time before the pandemic – see paragraphs 25, 28(50) and 28(51) above.

It follows that I have discounted the pandemic in considering the significance of this factor.

Having said that, it is clear from Barnes at paragraphs [95] to [98] that the term “financial dependence” in this context is a “somewhat elastic concept”. Whilst it is true that, at the time when the hypothetical contract arose, Mr Robson was doing very little work for anyone apart from the club and the sponsors, that was not due to a lack of demand for his services from elsewhere but was instead the result of a positive choice by Mr Robson following his recovery from illness in 2011. The fact that there continued to be a substantial demand for Mr Robson’s services at the time when the hypothetical contract arose suggests to me that the weight to be accorded to this factor is more limited than it would have been if that demand had not existed; and

other engagements – the fact that Mr Robson carried out similar work for organisations other than MUFC and the sponsors, such as England, in the period before the hypothetical contract arose might be said to point in favour of self–employment – see Barnes at paragraphs [85] to [88]. However:

For this reason, I am disinclined to give meaningful weight to this factor.

the Respondents are entitled to succeed in relation to the Employment Issue;

the appeal against the Determination in respect of the tax year ending 5 April 2020 fails to the extent that the consideration passing under the Ambassador Agreement was paid on or after 3 December 2019 and was attributable to the obligation personally to perform services and not attributable to the licensed image rights;

the appeal against the NICs Decision in respect of the tax year ending 5 April 2020 fails to the extent that the consideration passing under the Ambassador Agreement was paid on or after 3 December 2019 and was attributable to the obligation personally to perform services and not attributable to the licensed image rights;

the appeal against the Determination in respect of the tax year ending 5 April 2021 fails to the extent that the consideration passing under the Ambassador Agreement was attributable to the obligation personally to perform services and not attributable to the licensed image rights; and

the appeal against the NICs Decision in respect of the tax year ending 5 April 2021 fails to the extent that the consideration passing under the Ambassador Agreement was attributable to the obligation personally to perform services and not attributable to the licensed image rights.

the appeal against the Determinations insofar as the Determinations related to the tax years ending 5 April 2016, 5 April 2018 and 5 April 2019 should be allowed;

the appeal against the NICs Decisions insofar as the NICs Decisions related to the tax years ending 5 April 2016, 5 April 2017, 5 April 2018 and 5 April 2019 should be allowed;

the appeal against the Determination in respect of the tax year ending 5 April 2020 should be allowed to the extent that the consideration passing under the Ambassador Agreement was paid prior to 3 December 2019 or was attributable to the licensed image rights and should otherwise be dismissed;

the appeal against the NICs Decision in respect of the tax year ending 5 April 2020 should be allowed to the extent that the consideration passing under the Ambassador Agreement was paid prior to 3 December 2019 or was attributable to the licensed image rights and should otherwise be dismissed;

the appeal against the Determination in respect of the tax year ending 5 April 2021 should be allowed to the extent that the consideration passing under the Ambassador Agreement was attributable to the licensed image rights and should otherwise be dismissed; and

the appeal against the NICs Decision in respect of the tax year ending 5 April 2021 should be allowed to the extent that the consideration passing under the Ambassador Agreement was attributable to the licensed image rights and should otherwise be dismissed.