PGMOL v HMRC: The Final Decision or is This Extra Time?
By Zubair Ahmed, Senior Consultant at Chartergate Legal Services
Fitting that in a World Cup year, this case has followed a tournament narrative of its own. What began in the First-tier Tribunal (FTT) progressed through each round of appeal, from the Upper Tribunal to the Court of Appeal and, ultimately, the Supreme Court (SC), before returning to the FTT. After years of hard-fought litigation, it was ultimately held that the referees were not employees, and PGMOL succeeded in its appeal.
The Broader Significance of PGMOL v HMRC
Before diving into the FTT’s reasoning on why the referees were not employees of PGMOL, it is worth stepping back to consider the broader significance of this case. Having reached the SC, it has provided important clarification on how employment status should be determined for tax purposes. In doing so, the SC cautioned against tribunals placing disproportionate weight on mutuality of obligations (MOO) and control, at the expense of the wider factual picture.
Most notably, it reaffirmed the enduring authority of the Ready Mixed Concrete (RMC) three-stage test as the correct framework for analysing employment status.
View our previous article on revisiting FTT.
The Ready Mixed Concrete Three-Stage Test
By way of reminder, the RMC three-stage test can be summarised, in simplified terms, as follows:
Stage one (Personal Service & MOO)
The putative employee agrees that, in consideration of a wage or other remuneration, he or she will provide his or her own work and skill in the performance of some service for his or her putative employer.
Stage two (Control)
The putative employee agrees, expressly or impliedly, that in the performance of that service he or she will be subject to the other’s control in a sufficient degree to make that other his or her employer.
Stage three (Other Factors)
The other provisions of the contract are consistent with it being a contract of service.
With regard to the first two stages above, the SC held that the irreducible minimum of MOO and a sufficient framework of control are necessary conditions for a finding of a contract of employment. Where those conditions are satisfied, a tribunal is then able to proceed to consider all the circumstances of the relationship under stage three of the RMC test.
Importantly, having first found that the minimum threshold is met, the tribunal should revisit MOO and control to assess whether their nature, extent and significance are consistent with a relationship of employment. It is precisely at this stage that the FTT found itself in the present case.
The FTT’s Issue for Determination
To be clear, the issue for determination by the FTT is whether, taking into account all relevant terms of the individual match engagements and all surrounding circumstances known, or reasonably supposed to have been known, to both PGMOL and the referees at the time of each engagement, those contracts are properly to be characterised as contracts of employment.
Assessing the Full Employment Status Picture
In doing so, the FTT must consider the cumulative effect of all relevant factors and stand back to assess the picture as a whole. This reflects the point that, although a structured framework exists for analysing status, the outcome is ultimately fact-sensitive and will turn on the realities of each case. Here, the FTT not only examined the contractual terms but also the wider context in which they operated, i.e., the arrangements specific to Level 1 National Group football referees.
Why Context Matters in the Stage Three Assessment
Given the fact-sensitive nature of employment status assessments, it would not be appropriate to set out a detailed breakdown of each individual factor and how the FTT weighed it. Of more relevance to us and to our readers is the approach taken by the FTT to the SC’s judgment and the tweaked RMC test. For the purposes of this newsletter, we will briefly look at how the FTT revisited MOO and control when assessing the whole picture as part of stage three.
Revisiting MOO at Stage Three of the RMC Test
It is of course accepted that the SC has found that the irreducible minimum, or necessary, mutuality of obligations was satisfied in the individual match engagements. It is not therefore a question of whether mutuality exists in a technical sense, but what its nature, extent and significance reveal about the character of the relationship.
How the FTT Interpreted Mutuality of Obligations
The judgment helpfully breaks MOO down into a series of bite-sized factors. The overall conclusion, however, is clear: although each match involved the irreducible minimum of mutuality, i.e., a referee officiating a match in return for a fee, the FTT attached limited weight to this, given the narrow, one-off nature of each engagement.
The Reality of the Referee Engagements
More significant was the reality of the arrangements. Referees could freely decline appointments and, notably, withdraw even after accepting them, without breach or sanction. There was no obligation on PGMOL to offer work, nor on referees to accept it, and any regularity across a season reflected personal choice rather than contractual commitment.
Why the Obligations Pointed Away From Employment
Viewed in the round, the obligations were short-lived, flexible and largely voluntary. While mutuality existed in a technical sense, its nature and quality fell well short of that typically seen in employment, pointing towards contracts for services.
Revisiting Control at Stage Three of the RMC Test
While the SC accepted that a sufficient framework of control existed, the FTT’s task at stage three was to assess the nature and quality of that control. Although PGMOL operated a structured system, including match day procedures, fitness requirements, assessments, coaching and disciplinary powers, these features were not determinative when viewed in context.
Referee Autonomy and On-Field Decision Making
Crucially, referees retained full autonomy over the core officiating function: on-field decisions were final, could not be directed in real time, and were governed by the FA rather than PGMOL. Much of the apparent “control” also stemmed from external regulation, with PGMOL acting as administrator rather than employer.
Why Control Pointed Away From Employment
Viewed in the round, the FTT concluded that the control exercised was largely regulatory and developmental rather than managerial and supervisory. As such, its nature and quality fell short of the subordination typically seen in employment, pointing away from a contract of employment.
Other Factors
As noted, all factors must be considered in context, and readers are encouraged to review the judgment in full. By way of summary, however, a few points stand out:
- On integration, although referees were embedded within PGMOL’s systems, their professional identity derived from the FA, with PGMOL acting in an administrative role, meaning they were not integrated in the employment sense.
- Economically, refereeing was a hobby, albeit a serious one, fitted around full-time employment. Referees were paid per match, with no salary or retainer, and could decline or withdraw from engagements without material economic consequence.
- Finally, while referees were required to provide personal service, a factor that can often point towards employment, the FTT found that the absence of a right to substitute was inherent to the nature of refereeing, requiring accreditation, neutrality and formal appointment, rather than indicative of the underlying relationship. Accordingly, the substitution factor was treated as neutral.
What Does All This Mean?
Subject to any further appeal by HMRC, the appeal process has now given PGMOL a clear victory and our first example of the tribunals applying the amended three-stage RMC test. While the FTT’s analysis is only persuasive, it offers useful insight into how tribunals are likely to approach the wider stage three assessment in practice.
Status Determinations Remain Highly Fact-Sensitive
If anything, the decision reinforces that status determinations are more fact-sensitive than ever. Context is critical, including the nature of the services, how they are actually delivered, and any wider regulatory framework governing them. These factors all feed into the “overall picture” that tribunals are required to assess.
The Limits of Automated Status Tools
That also raises questions about the reliability of automated online status tools, which often rely on fixed answers to structured questions without any real appreciation of context or nuance. Real-world status analysis depends on a detailed understanding of how arrangements operate in practice.
Getting Specialist Support With HMRC Status Enquiries
For that reason, specialist input is often essential when reviewing workforce status, contractual arrangements, or responding to HMRC enquiries. Chartergate Legal Services can assist in analysing the arrangements in context and advising on the correct status position, particularly where HMRC has opened an enquiry or challenge.
Learn more about HMRC Enquiries here.
Disclaimer: Chartergate Legal Services Ltd has drafted this email update to provide you with a general overview of the relevant law and developments at the date of sending only. This email is provided as a general overview and should be taken as such. It is not a substitute for professional advice that is specific to your circumstances and should not be relied upon as such.
