United legend partially falls foul of IR35 legislation

Former Manchester United and England football captain Bryan Robson has had a partial victory in his dispute with HMRC as to whether his role as a Global Ambassador for the club, provided through his company Bryan Robson Limited (BRL), fell within the IR35 legislation.  The period in dispute covered the tax years 2015-16 to 2020-21.

BRL appealed the tax determinations and NIC decision issued by HMRC covering the relevant tax years. Prior to the hearing it was conceded by HMRC that up to 2 December 2019 the Personal Ambassador Agreement was between Mr Robson and MUFC and not BRL and the football club therefore the IR35 legislation could not apply to the period up to this date.

The appeals before the Tribunal focused on the amounts paid from 3 December 2019 to 5 April 2021.  This case was slightly different from other recent high profile IR35 cases in that BRL argued that all or at least some of the income fell outside of IR35 because it was attributed to BRL allowing MUFC to exploit Mr Robson’s image rights.    

The Tribunal case was held over 4 days and looked in detail at the question of the IR35 legislation, images rights and whether those rights should be taxed under IR35.  

The Tribunal upon reviewing all the factors provided and applying the Ready-Mix Concrete 3-stage test concluded that the pointers towards employment outweighed the pointers towards self-employment.

The employment factors included –

• Strong mutuality of obligation including Mr Robson’s personal service was part of the essence of the hypothetical contract.
• MUFC were entitled to control the “what”, “when”, “were” and “how” the services were provided by Mr Robson.
• Absence of financial risk
• Mr Robson was economically dependent on MUFC although it was noted that the absence of other work was down to Mr Robson’s personal choice
• Mr Robson had a strong connection with the club and the engagement had been ongoing for several years.
• The services provided by Mr Robson were integral to the business of the club and therefore he was considered to satisfy the part and parcel test.

Whilst the Tribunal has concluded that the IR35 legislation does apply, it has directed that HMRC and BRL must determine what proportion of the payments received by BRL relate to image rights and therefore not subject to IR35. The balance of the payments will then subject to IR35 deemed payment calculation to establish any additional tax liability due.

This case highlights the fact that HMRC continue to have some success when applying the IR35 legislation to high profile individuals that enter into agreements that may not be quite as compliant as they would like. The devil is in the detail.