Court of Appeal solidifies HMRC’s IR35 win

11 May 2022

  • In the case of Kickabout Productions Ltd v HMRC [2022] EWCA Civ 502  the Court of Appeal (“CoA”) agreed with the Upper Tribunal’s (“UT”) finding that, under the hypothetical contracts, Mr Hawksbee of Kickabout Productions Limited (“KPL”) would have been an employee of Talksport Limited (“Talksport”).
  • KPL appealed to the CoA on four grounds;
  1. The UT erred in its interpretation of the contracts as regards the obligation of Talksport to provide work
  2. The UT erred in its approach to the jurisdiction to remit or remake the decision
  3. The UT erred in its evaluation of the issue of control
  4. The UT erred in its approach to the evaluative exercise to be undertaken at stage three of the Ready Mixed Contract test (extend of control under hypothetical contracts)
  • The CoA dismissed all of KPL’s grounds finding that the UT was correct to hold that the hypothetical contracts did contain mutuality of obligation (“MOO”)
  • the CoA stated the UT was entitled to remake the decision and the arguments put forward by KPL were “no more than an attempt to re-argue the issue”
  • Ground 4 (above) challenges the UT’s conclusion on the multi-factorial assessment to be carried out after MOO and control has been established, on grounds that the UT took account of irrelevant factors and disregarded relevant factors, but the CoA found that no challenge could be made of the UT’s assessment

Please see our summary of the UT decision, here.

The full CoA judgement can be found here.

Aspire Comment

This case continues to demonstrate the complexity in determining whether IR35 applies and the multitude of factors that must be considered on a case-by-case basis. We expect the number of cases being passed between judges in relation to IR35 will only increase as a result of the extension to the off-payroll reforms into the private sector in April 2021. HMRC’s light touch approach to penalties has also come to an end now meaning that we are likely to see more and more IR35 challenges in both the public and private sectors.

Make sure you get in touch with Aspire if you have any IR35 training requirements or would like to discuss an ongoing IR35 enquiry with us.