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HMRC Appeal Win Overturns IR35 Decision – What Does it Mean for Contractors?


HMRC has won their appeal against the First Tier Tribunal (FTT) decision that the relationship between TalkSport Radio and presenter Paul Hawksbee was outside IR35. This leaves Mr. Hawksbee’s company, Kickabout Productions Ltd (KPL), with a tax and NIC liability of over £140,000.

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The FTT decision saw one member of the panel deciding that the relationship lay inside IR35, and the other that he was not. As Judge Scott, who decided Hawksbee was outside IR35, had the casting vote, Mr. Hawksbee won the case.

HMRC has successfully appealed to the upper tribunal (UT), and this decision has been overturned. Industry experts have yet to release detailed analysis of the case, and the effect it will have on future cases is not yet known. However, it does demonstrate how complex IR35 determinations can be.

The factors considered by the courts

Mutuality of Obligation (MOO)

MOO exists if the engager has an obligation to provide work, and the worker has an obligation to perform tasks requested by the engager. The presence or absence of MOO is generally considered to be a strong indicator of employment status.

This was a point of disagreement at the FTT, where both panel members agreed that MOO was present, but Judge Scott did not believe it was a strong indicator of employment in this case.

The UT concluded that TalkSport did have an obligation to provide work for Hawksbee, and that Kickabout was obliged to make him available, so MOO was present.


This is the degree to which the engager controls when, where and how the worker completes the work. In this case the FTT decided that TalkSport did have control over where and when Hawksbee worked. Crucially, however, they found that TalkSport did not control how tasks were performed.

The UT found that, while Talksport did not control how the presenter performed, their control over which tasks he performed, and when and where he performed them, was enough to be consistent with an employment relationship.

Other factors:

Pointing towards an “inside” decision Pointing towards and “outside” decision
  • Hawksbee had been presenting the show for 18 years
  • He could not supply a substitute
  • The contracts limited his ability to provide his services to other radio stations
  • 4 months’ notice was required to terminate
  • Fixed fee per show
  • A narrow range of tasks to be performed
  • No sick pay, holiday pay, or other employment rights
  • Not required to attend training or medicals
  • Not part and parcel of the organisation

The day to day reality has to match the contract

This case illustrates how important it is to make sure that the reality of your situation matches the contract. For example, in this case the contracts may have contained no obligations to supply or accept work, but the UT found:

“On KPL’s interpretation, despite KPL having accepted obligations that would make it extremely difficult for Mr Hawksbee to earn a living by working full-time for anyone else, Talksport was not obliged to offer KPL or Mr Hawksbee any work at all.

‘We regard that outcome as so contrary to business common sense as to call into question whether it was the true effect of Contract One.”

This is a good example of the letter of a contract being ignored by the courts because it doesn’t reflect the observed reality. In this case, other obligations in the contract, and the fact that the arrangement had been in place for 18 years, suggested a clear and powerful expectation that Talksport would offer work to Mr. Hawksbee.

Dependence on a single client may indicate that you’re inside IR35

The fact that Mr. Hawksbee had presented the show for 18 years comes up several times in the UT’s reasons for finding him to be inside the scope of IR35, and they also stated that the 4-month notice period was an indication of employment.

There is an expectation that contracting involves working for more than one client, and that contractors will offer and want flexibility. Working for a single client for a long time, particularly in conjunction with a long notice period, suggests dependence on that one client and could damage your argument that you’re outside IR35.

What can contractors learn from this decision?

We don’t yet know how this decision will affect future cases, but there are still useful things that contractors can take from it when considering their IR35 status.

The main message here is how complex and nuanced IR35 determinations in general, and MOO in particular, can be. This case is a particularly good example, because we can see the courts themselves disagreeing on the weight given to various factors. It’s also clear from this case that MOO is of vital importance when determining IR35 status.

It’s important to get expert advice

We strongly advise anyone who contracts through their PSC to get a professional IR35 review from an independent expert for each new contract, and this case illustrates why that is so important. It’s just not reasonable to expect a contractor to successfully navigate this level of complexity without expert help. The same is true for end clients, who will be responsible for most IR35 status determinations after April 2021.

If you have any questions or if we can help in any way please call our expert team on 01296 468 483 or email

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