Inage source: Bryan Robson in a video tribute to Denis Law/Manchester United: https://www.manutd.com/en/videos/detail/bryan-robson-interview-paying-tribute-to-man-utd-legend-denis-law
Former England Footballer Bryan Robson has joined the IR35 Decade Club despite winning most of his appeal to the First-tier Tax Tribunal. The case centres on services Robson provided to Manchester United as a Global Ambassador from 2015/16 to 2020/21 via his company, Bryan Robson Limited.
Two IR35 and Off-Payroll experts provide their thoughts on the case.
The case concerned the IR35 legislation and whether Robson was working as a deemed employee for UK football team Manchester United.
Robson appealed all six tax years, of which the first four were allowed, leaving 16 months from 03 December 2019 to 06 April 2021, during which a proportion of his earnings should have been treated as deemed employment.
The tribunal has directed the parties to agree and set aside part of his earnings, which constitute image rights, and, for the rest, decide on the quantum of the extra tax due under the IR35 rules.
The concept of ‘deemed employment’ has never been workable, and the replacement Off-payroll legislation is proving to be a considerable drag on the competitiveness of UK business, impeding UK Growth at a time when the Labour Party desperately need the pendulum to swing the other way.
Dave Chaplin, CEO of IR35 Shield
What’s the Robson backstory?
While Robson started his role as an ambassador in 2008, the contractual terms referenced Man United engaging him personally (as opposed to engaging his company, Bryan Robson Limited). This meant the years up to 2019 weren’t scrutinised under IR35.
The case related to the work Robson carried out as an ambassador for Manchester United. Robson was paid £150,000 every six months and was obliged to make 35 personal appearances at functions and events as a minimum, every six months, according to information shared with The Freelance Informer,
However, HMRC took the view that Robson provided his services to his former club in a way that reflected employment, not self-employment and therefore belonged inside the scope of the IR35 legislation. The First Tier Tribunal judge agreed.
What can freelancers learn from the Robson case?
The judge’s decision was based on the following:
- Income: Robson was economically dependent on Man United, which made up 87% of his income (£171,000) in the ‘19/20 tax year and 94% of his income (£319,000) in the ‘20/21 tax year
- Personal service: There was no substitution clause and Robson provided his services in a personal capacity
- Part and parcel: Robson had a strong connection to the club for many years
- Length of service: his engagement, as an ambassador, had been running for over a decade
Expert views on the case
Seb Maley, CEO of IR35 specialist, Qdos, said this high-profile HMRC win underscores the importance of ensuring compliance. “Whether you’re a freelancer, contractor or business engaging these workers. It’s a complex case that brings the many nuances of the IR35 legislation into sharp focus,” said Maley.
He continued, “But make no mistake, this wasn’t your average freelancer and client relationship. Man United controlled many elements of this engagement – a hallmark of an employer-employee relationship. Ideally, freelancers and contractors working outside of IR35 need a high level of autonomy to be considered truly self-employed.
“There’s a lot to learn from this case, which incidentally might well yet be appealed. First, that contracts need to be watertight, with each party in agreement of the terms – and with that, IR35 status – from the word go. After all, the first port of call for HMRC in an investigation is the contract itself.”
Dave Chaplin, CEO of IR35 compliance firm IR35 Shield, who attended the hearing, said:
“Robson is now a member of another unfortunate club, the “IR35 Decade Club” of individuals who, due to the unworkable IR35 legislation, was left in a position of tax uncertainty, almost 10 years after his services were provided.”
Chaplin said the case was complex, noting the decision is 118 pages long and required “considerable submissions and arguments over a four-day hearing.”
“It is unlikely that the final tax bill owed by Bryan Robson Limited will cover the cost of HMRC’s internal fees, Counsel fees, and the hearing, leaving a net loss to the Treasury” said Chaplin.
Chaplin suggests such cases are slowly killing the UK’s economy and its competitiveness: “The concept of ‘deemed employment’ has never been workable, and the replacement Off-payroll legislation is proving to be a considerable drag on the competitiveness of UK business, impeding UK Growth at a time when the Labour Party desperately need the pendulum to swing the other way.”
He continued, “The Government and taxing authorities should be celebrating the entrepreneurial spirit of freelancers who simply want to be their own boss, not vilifying them by enacting damaging ideologically-led legislation which curbs their freedoms.”
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