Case law: HMRC win Kickabout appeal

HMRC v. Kickabout Productions Ltd [2020] UKUT 216 (TCC)

Kickabout Productions Ltd (“KPL”) is a ‘personal service company’ owned by Paul Hawksbee, a radio presenter and script-writer.  During the tax years 2012-13 to 2014-15, KPL entered into contracts with Talksport Ltd under which KPL agreed to provide the services of Mr Hawksbee as a presenter on Talksport Radio’s Hawksbee and Jacobs show, a three-hour radio programme broadcast every weekday from 1 pm to 4 pm.


This is an appeal against the Decision of the FTT that held that Mr Hawksbee was not a deemed employee and, therefore, was not liable for the tax HMRC claim was owed. 

In the period under appeal, there were two contracts and some of the clauses were disputed between Contract One and Contract Two.  When HMRC’s grounds of appeal were considered, the tribunal analysed the FTT’s conclusions and reasoning as to the effect of these contracts. Judge Scott decided that neither Contract One nor Contract Two imposed any obligation on Talksport to provide Mr Hawksbee with work although both contracts did require KPL to provide the services of Mr Hawksbee for a minimum of 222 shows per year. Mr Baker, the Tribunal member on the panel, did not agree with this conclusion and an appendix to the Decision set out the reasons for his dissent. Judge Scott’s conclusion on this issue, however, prevailed on an exercise of his casting vote.

Grounds for appeal

HMRC appealed the Decision on eight grounds.  One of the main areas for argument was Clause 8 on mutuality of obligations.

HMRC appealed under Ground 1 – that the FTT erred in law and/or reached a perverse conclusion in finding that under the actual contracts between KPL and Talksport, Talksport had no obligation to provide any work to KPL. In addition, the FTT erred in law in finding, at the third stage of its analysis of the Ready Mixed Concrete criterion that an obligation on an employer to offer work during the term of a contract is a “touchstone of employment”, the absence of which points away from employment and towards self-employment.

Ground 1(a) – First, it is said that the FTT made errors of law when reaching the conclusion that the actual contracts between KPL and Talksport imposed no obligation on Talksport to provide shows for Mr Hawksbee to present. Those errors resulted in the FTT wrongly concluding that the hypothetical contracts would similarly impose no such obligation on Talksport.

The appeal is allowed on Ground 1(a). Under both hypothetical contracts, Mr Hawksbee would have been an employee of Talksport. We therefore remake the Decision so as to result in KPL’s appeals against the PAYE assessments and Notices of Determination issued for national insurance purposes being dismissed.

Mutuality of obligations

This is another unfortunate episode in the life of MOO.  I have long held the belief that Mutuality of Obligations is not an appropriate test in tax law cases for various reasons (I have written an article on this).  The Upper Tribunal allowed the appeal based on the wording in Contract One and Two. There was an obligation on Talksport to provide work and on KPL to provide the services but, this is standard contract law and plays right in to the hands of HMRC’s argument.

This is a long running argument that sees no signs of abating and has just muddied the waters further.  I look forward to the appeal.

Published: 24 July 2020