BASIC BROADCASTING LIMITED v Revenue & Customs (INCOME TAX AND NATIONAL INSURANCE - intermediaries legislation) [2022] UKFTT 48 (TC)

FTT-Tax

BASIC BROADCASTING LIMITED v Revenue & Customs (INCOME TAX AND NATIONAL INSURANCE - intermediaries legislation)

[2022] UKFTT 48 (TC) · 2019-11-19

[214]The Court of Appeal considered the relationship between mutuality of obligation in the overarching contract and in the discrete contracts. It summarised the position at [118] as follows: 118. McMeechan , Clark , Carmichael and Prater , which bind this Court, are all cases in which this Court considered, in one way or another, the relationship between mutuality of obligation in an overarching contract and in a single engagement. They establish at least three propositions.(i) The question whether a single engagement gives rise to a contract of employment is not resolved by a decision that the overarching contract does not give rise to a contract of employment.

(ii) In particular, the fact that there is no obligation under the overarching contract to offer, or to do, work (if offered) (or that there are clauses expressly negativing such obligations) does not decide that the single engagement cannot be a contract of employment. The nature of each contract is a distinct question.

(iii) A single engagement can give rise to a contract of employment if work which has in fact been offered is in fact done for payment.

[119]Those authorities do not support any suggestion that the criterion of mutuality of obligation is the sole, qualifying test for the existence of a contract of employment, so that if there is some mutuality, but it is not the right kind of mutuality, there can be no contract of employment. On the contrary, those authorities, and the other authorities to which we were referred, suggest that the court has to look at all the circumstances in the round before deciding whether or not there is a contract of employment. The Court of Appeal in McMeechan specifically rejected a submission to that effect by the Secretary of State. The Court of Appeal in Prater rejected similar submissions by the appellant council in that case.215. The Court of Appeal held at [122] that the FTT had been wrong to consider that there was no mutuality of obligation in the discrete contracts because either party could pull out of an engagement before a match: 122. The first of the FTT’s two main reasons for deciding that there was no contract of employment as respects the individual engagements was lack of mutuality of obligation. It considered that the fact that either side could pull out of the engagement before a game, without any breach of contract, or any sanction, negated the necessary mutuality of obligation. In my judgment, the FTT erred in law in deciding that the ability of either side to pull out before a game negated the necessary mutuality of obligation. The authorities which I have referred to above, in para [68], show that that is not the correct legal analysis. The correct analysis is that if there is a contract, the fact that its terms permit either side to terminate the contract before it is performed, without breaching it, is immaterial. The contract subsists (with its mutual obligations) unless and until it is terminated by one side or the other.

216. The Court of Appeal also held that the Upper Tribunal had been wrong to find at [100] of its decision that there was no mutuality of obligation in the discrete contracts:

[124]The authorities I have summarised above show that the UT erred in law in concluding in paragraph 100 that the individual contracts could not be contracts of employment if they merely provided for a worker to be paid for the work he did, and, in paragraph 101, in concluding that the statements about the mutuality of obligation which is necessary to found an overarching contract also apply to individual engagements. The UT also erred in law in upholding the conclusion of the FTT that provisions in a contract which enabled either side to withdraw before performance negated the necessary mutuality of obligation. 217. Mr Rivett submitted that PGMOL concerned single engagement contracts and provided no meaningful assistance in relation to overarching contracts, such as the ITV Contracts in the present appeal. In the context of that submission we note that the Court of Appeal in PGMOL referred to the difficulties of analysis at [48]:

[48]Where an employee works seasonally, or intermittently, he may need to establish, in order to show that he has the necessary continuity of employment, that his relationship with his employer was governed by an overarching contract during the periods when he is not actually working. It is necessary to recognise, when considering the reasoning in any decision of the EAT (or of the Court of Appeal on appeal from the EAT), that in some cases, the employee had to establish that there was an overarching contract between him and his putative employer which bridged any gap between periods of work, and that in other cases, he did not, and that the criteria which apply to overarching contracts do not necessarily apply to contracts for a specific piece of work or engagement. It is further necessary to recognise that the legal reasoning in these decisions may not apply across the board, and to recognise which parts of the reasoning were essential to the actual decision in the case, and which parts were obiter. A further complicating factor is that some of the decisions analyse tri-partite relationships between employment agencies, their clients, and applicants/claimants, and that there is no tri-partite relationship in this case.218. Mr Tolley submitted that simply because the client may exercise a choice to withhold work or the employee had a right to refuse work does not mean that the obligations are not sufficiently work-related. The focus is whether there is an obligation on the worker to work and the client to provide or pay for it. This was the issue between the parties. Mr Rivett’s submission was that there must be some obligation on the client to provide some work.

219. We accept Mr Tolley’s submissions in this regard. We do not find specific support for his submission in the judgment of the Court of Appeal in PGMOL . However, it is clearly supported by a decision of Langstaff J sitting in the Employment Appeal Tribunal in Cotswold Developments Construction Ltd v Williams

[2005] UKEAT 0457

where he stated:

[55]We are concerned that Tribunals generally, and this Tribunal in particular, may, however, have misunderstood something further which characterises the application of "mutuality of obligation" in the sense of the wage/work bargain. That is that it does not deprive an overriding contract of such mutual obligations that the employee has the right to refuse work. Nor does it do so where the employer may exercise a choice to withhold work. The focus must be upon whether or not there is some obligation upon an individual to work, and some obligation upon the other party to provide or pay for it.220. This passage was cited with approval by Elias J also in the EAT in James v Greenwich LBC : 16. The authorities do not speak with one voice as to precisely what mutual obligations must be established. The relevant cases were analysed carefully by Langstaff J in Cotswold Developments Construction Ltd v Williams

[2006] IRLR 181

, paras 19—23. As he points out, sometimes the employer’s duty is said to be to offer work, sometimes to provide pay. The critical feature, it seems to us, is that the nature of the duty must involve some obligation to work such as to locate the contract in the employment field. If there are no mutual obligations of any kind then there is simply no contract at all, as Carmichael v National Power plc [1999] ICR makes clear; if there are mutual obligations, and they relate in some way to the provision of, or payment for, work which must be personally provided by the worker, there will be a contract in the employment field; and if the nature and extent of the control is sufficient, it will be a contract of employment. 17. In short, some mutual irreducible minimal obligation is necessary to create a contract; the nature of those mutual obligations must be such as to give rise to a contract in the employment field; and the issue of control determines whether that contract is a contract of employment or not.

221. It was pointed out to us that Elias J in a subsequent case corrected the impression given in these passages that the issue of control was determinative. However, that does not affect the endorsement given to Cotswold Developments . Further, the language used to describe mutuality of obligation in these two authorities is echoed in the reference to a “work-related” obligation by Briggs J in Weight Watchers in which he referred to both cases.

222. Mr Tolley also submitted that an expectation derived from practice that work will be provided during the contract may give rise to a legal obligation to provide work for these purposes (See St Ives v Heggarty UKEAT 0107/08 and Kickabout at [35]). We accept that submission, although Mr Rivett said no such obligation arose on the present facts. Control

223. A sufficient right of control in respect of what is to be done, and where, when and how it is to be done is an important requirement of an employment relationship, but by itself it is not decisive. The key question in this regard is not whether in practice the worker has actual day to day control over his own work, but whether there is, to a sufficient degree, a contractual right of control (see White v Troutbeck

[2013] IRLR 286

at [40]-[43] per Richardson J, upheld in the Court of Appeal at

[2013] IRLR 949

, and Morren v Swinton and Pendlebury BC

[1965] 1 WLR 576

). The question whether control is “sufficient” for this purpose must take into account the practical realities of the particular industry, considering those aspects of the performance of work that can be controlled in that industry.

224. In identifying whether there is a right of control, the starting point is the express terms of the contract. If the express terms do not answer the question, then it is necessary to consider the matter by way of implication - see Ready Mixed Concrete at p515F: … Control includes the power of deciding the thing to be done, the way in which it shall be done, the means to be employed in doing it, the time when, and the place where it shall be done. All these aspects of control must be considered in deciding whether the right exists in a sufficient degree to make one party the master and the other his servant. The right need not be unrestricted. ‘What matters is lawful authority to command, so far as there is scope for it. And there must always be some room for it, if only in incidental or collateral matters.’ - Zuijus v Wirth Brothers Pty Ltd ((1955), 93 CLR 561 at p 571.). To find where the right resides one must look first to the express terms of the contract, and if they deal fully with the matter one may look no further. If the contract does not expressly provide which party shall have the right, the question must be answered in the ordinary way by implication.

225. The Upper Tribunal in Christa Ackroyd Media Ltd v HM Revenue & Customs

[2019] UKUT 326 (TCC)

considered that passage at [47] and said as follows: 47. That guidance was considered and applied in White v Troutbeck … The approach taken in that case, with which we respectfully agree, was to interpret MacKenna J's guidance as requiring not a formal analysis as to an implied term in the contract but an exercise of contractual construction. The court or tribunal must address 'the cumulative effect of the totality of the provisions in the agreement and all the circumstances of the relationship created by it' (per the Court of Appeal at para [38]) and decide whether as a matter of construction ultimate control by the recipient of the services exists, notwithstanding the absence of an express provision in the contract.

226. The significance of control was considered by the Court of Appeal in Montgomery . That was a case of an agency worker seeking to establish that she was an employee of the agency. Buckley J (with whom Brooke and Longmore LJJ agreed) considered the position of employees with a high degree of autonomy. He stated as follow at [19]:

[19]MacKenna J made plain [in Ready Mixed Concrete] that provided (i) and (ii) are present (iii) requires that all the terms of the agreement are to be considered before the question as to the existence of a contract of service can be answered. As to (ii) he had well in mind that the early legal concept of control as including control over how the work should be done was relevant but not essential. Society has provided many examples, from masters of vessels and surgeons to research scientists and technology experts, where such direct control is absent. In many cases the employer or controlling management may have no more than a very general idea of how the work is done and no inclination directly to interfere with it. However, some sufficient framework of control must surely exist. A contractual relationship concerning work to be carried out in which the one party has no control over the other could not sensibly be called a contract of employment. MacKenna J cited a passage from the judgment of Dixon J in Humberstone v Northern Timber Mills

(1949) 79 CLR 389

from which I take the first few lines only:

‘The question is not whether in practice the work was in fact done subject to a direction and control exercised by any actual supervision or whether any actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter's order and directions.’ 227. The same point was made by Vinelott J in Walls v Sinnett [1987] STC 236 at p246c in relation to a professional singer who lectured in music at a technical college: The other point that was very much stressed by the taxpayer is the modest degree of control which in practice was exercised by the governors and the principal of the college. In some contexts the degree of control exercised may be very important in deciding whether someone is an employee or servant, but in the case of a senior lecturer at a college of further education, more particularly one who like the taxpayer came into teaching from active work as a singer, it is not surprising to find that he was given a very wide degree of latitude in the organisation of his work and time. 228. In PGMOL at [69], the Court of Appeal endorsed what was said by the High Court of Australia in Zuijs v Wirth Bros Pty Ltd (1955) 93 CLR 561 , quoted above. 229. The focus in cases such as the present is on the ‘what’, ‘how’, ‘when’ and ‘where’ the services are performed. The Upper Tribunal in Atholl House described it as follows at [92(2)]: In determining whether the right of control exists in a sufficient degree, the putative employer’s power to decide what is to be done, the way in which it is to be done, the means to be employed in doing it and the time and the place where it is to be done must all be considered (Ready Mixed Concrete at 515F). As a shorthand we will, like the parties, refer to this as control over the “what”, the “how”, the “when” and the “where”. 230. In Ready Mixed Concrete , MacKenna J referred at p515F to control as including the power of deciding the thing to be done. We accept that may be relevant in certain circumstances but we agree with Mr Rivett that in considering control over what is to be done, it is important to bear in mind the contractually agreed description of the work that is to be done. A client can clearly require the contractually agreed description of the work to be done, but that may not say anything about the nature of the relationship. On the other hand, the fact that the worker cannot be moved from one task to another outside the scope of the contractually agreed description of work does not mean that there is not sufficient framework of control. A sufficient framework of control can still exist where a skilled worker is engaged for a specific task (see Kickabout at [80] and Atholl House at [94]-[97]). 231. The authorities show that direct control over how the work is to be done is not essential for an employment contract. What is required is a sufficient framework of control. This was emphasised by the Upper Tribunal in Christa Ackroyd Media when discussing what was meant by a sufficient framework of control at [54]: 54. … we do not consider that Buckley J [in Montgomery ] was addressing the granular mechanics of control in this context. In the first place, there is no discussion which would indicate that particular performance tools such as appraisals or line managers were material. If the passage is read as a whole, the point being made is simply that set out in Humberstone v Northern Timber Mills and cited in Ready Mixed Concrete , namely that what mattered in determining control was not the practical exercise of day-to-day control and whether “actual supervision” was possible, but “whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter’s order and directions”. That point is made clear in White v Troutbeck , where the Employment Appeal Tribunal (at paragraphs 40 to 42) expressed the question as whether the owner of an estate who left a servant in charge of a property “retained the right to step in and give instructions concerning what was, after all, their property”, pointing out that the delegation of day-to-day control did not mean that the owner had “divested himself of the contractual right to give instructions to them”. 232. A similar approach was taken by the Court of Appeal in PGMOL at [69]: 69. A further legal issue is what degree of control is necessary. At this stage, all I need to say is that I agree with the UT that the FTT directed itself correctly in para [16] on the criterion of control. The FTT referred at [163] to a statement in para [19] of Montgomery v Johnson Underwood Ltd [2001] EWCA Civ 318 , [2001] IRLR 269 , [2001] ICR 819 that there must be a ‘ “sufficient framework of control” … in the sense of “ultimate authority” … rather than there necessarily being day-to-day control in practice’… 233. As to where and when the work is to be done, we consider that the relevance of the fact that work is required to be done at a certain location and at a certain time will depend on the circumstances. If a painter is engaged to paint a house over a particular weekend, clearly he is required to provide his services at that house and at that time. The client is contractually entitled to require the work to be done at that location and at that time, but that might say little if anything about the nature of the relationship. In circumstances where it does, for example because the painter is regularly required to paint different houses at different times, the existence of control is not determinative because other factors may show that the painter is self-employed in business on his own account. 234. Mr Rivett submitted that we should be wary about finding control from the nature or quality of the service itself. As we understood the submission, it was that where the contracting parties agree that certain things should be done, no relevant right of control can be identified from the fact that the worker can be required to do that thing. There was no control over the worker in the performance of what had been agreed to be done. A similar submission was made in Atholl House , in relation to an argument that employees can generally be moved to different tasks at the employer’s command. The argument was rejected at [97] as follows: 97. It follows that we do not accept [Atholl House’s] submission that the absence from the hypothetical contract with Ms Adams of any clause allowing the BBC to deploy on tasks other than the Kaye Adams Programme is fatal to the argument that the BBC had sufficient control at the second Ready Mixed Concrete stage. We do, however, accept that the presence or absence of such a provision would be of some relevance in determining whether there is ‘some sufficient framework of control’. 235. It seems to us that the context will always be important. White v Troutbeck involved persons who were engaged as caretakers and managers of certain accommodation and to prepare it for occasional visits by the owner. The EAT held that there was a right to control the way in which the services were provided. It stated at [49]: 49. …Given the many duties which Mr White and Ms Todd undertook, it would be particularly surprising if there was no right to given them instructions concerning ground-keeping and house-keeping in connection with a visit. Clear words would, in my judgment, be required to divest Troutbeck, the owners of what was in part a home for them to visit, of the right to give reasonable instructions about the house and grounds during the period of a visit… 236. We shall return to Mr Rivett’s submission when we come to consider the services Mr Chiles agreed to provide. 237. It is clear that what amounts to a sufficient contractual right of control will vary with the industry in which the individual works. Mr Rivett submitted that obligations which necessarily apply to everyone within an industry have little to say about whether a client has sufficient control to establish a worker as an employee. We did not understand Mr Rivett’s submission to go so far as to say that such rights should be left out of account. His submission was that they have little weight in the context of TV and radio presenters. 238. Mr Tolley submitted that this submission was wrong in law. It was wrong to leave a contractual right of control out of account merely because it is a right required by the client to comply with regulatory obligations or because it is a right that applies in respect of all people engaged by the organisation. The Upper Tribunal in Christa Ackroyd Media said as much at [59] when rejecting the taxpayer’s submission that control imposed in order to ensure compliance with the BBC’s Editorial Guidelines could not be relevant where the guidelines applied to employees and non-employees alike: 59. In this appeal, Mr Maugham’s argument on this issue probably amounts to an assertion either that the obligations imposed on Ms Ackroyd under Clause 9 of the Contract are not relevant to control because of the BBC’s reasons for imposing them, or that because the BBC’s obligations under the Guidelines applied in relation to content provided by all content providers, they were not properly part of the relevant context in considering ultimate control. We do not accept either argument. 239. Control in the context of compliance with regulatory rules was considered by the Upper Tribunal in Atholl House : 105. In his submissions, Mr Gordon sought to downplay the significance of this control as being mere ‘editorial control’ that was imposed only to meet the BBC’s regulatory guidelines and could only be exercised after the event by imposing sanctions on Ms Adams if she failed to comply. We disagree. The control was significant and related to the very tasks that Ms Adams could be required to perform. 106. The BBC also had some control over the ‘how’

. Under the hypothetical contract, it could require Ms Adams to adhere to the BBC’s and OFCOM’s guidelines. Admittedly, there was little that the BBC could do in ‘real time’ if Ms Adams breached those guidelines. However, as we have observed at para [92](4) above, this is not necessary and, in any event, the BBC retained a right to impose sanctions should Ms Adams fail to adhere to its stipulations as to how the show should be conducted. 240. We agree with Mr Tolley that such rights of control are relevant and important. Mr Tolley also submitted that a contractual right of control which is only exercisable after the performance of the service is still a relevant element of control. That must be right and reflects what the Court of Appeal said at [130] in PGMOL , accepting the Upper Tribunal’s conclusion that it was irrelevant that PGMOL could not step in during a match to impose a sanction for breach of a term of the contract: 130. … as the UT recognised, the authorities do not require that an employer’s directions be ‘enforceable, in the sense that there is an effective sanction for their breach’. I do not consider that there is any such requirement, or that, for the purposes of the control criterion, an employer’s directions are only enforceable contractual obligations if there is an effective sanction for their breach... 241. We also note what was said by the Supreme Court in relation to a similar argument in Uber BV v Aslam

[2021] UKSC 5

at [102]:

[102]I would add that the fact that some aspects of the way in which Uber operates its business are required in order to comply with the regulatory regime - although many features are not - cannot logically be, as Uber has sought to argue, any reason to disregard or attach less weight to those matters in determining whether drivers are workers. To the extent that forms of control exercised by Uber London are necessary in order to comply with the law, that merely tends to show that an arrangement whereby drivers contract directly with passengers and Uber London acts solely as an agent is not one that is legally available.242. Absence of control as to the detailed way in which work is performed is not inconsistent with the employment of a skilled person (see Morren v Swinton and Pendlebury Borough Council

[1965] 1 WLR 576

per Lord Parker CJ at 582A-C; Lee Ting Sang v Chung Chi-Keung

[1990] 2 AC 374

per Lord Griffiths at 384A; and Montgomery v Johnson Underwood Ltd

[2001] EWCA Civ 318

per Buckley J at [19]).

243. The significance of control is that the employer can direct what the employee does, not necessarily how he does it (see Catholic Child Welfare Society & Ors v Various Claimants

[2012] UKSC 56

per Lord Phillips at [36]:

[36]In days gone by, when the relationship of employer and employee was correctly portrayed by the phrase "master and servant", the employer was often entitled to direct not merely what the employee should do but the manner in which he should do it. Indeed, this right was taken as the test for differentiating between a contract of employment and a contract for the services of an independent contractor. Today it is not realistic to look for a right to direct how an employee should perform his duties as a necessary element in the relationship between employer and employee. Many employees apply a skill or expertise that is not susceptible to direction by anyone else in the company that employs them. Thus the significance of control today is that the employer can direct what the employee does, not how he does it.244. The same point was made in the context of a radio presenter in Kickabout at [80]: 80. Moreover, the FTT’s finding that Talksport had ‘relatively narrow’ control over what tasks Mr Hawksbee performed does not prevent the sufficient framework of control from being present. As HMRC submitted, skilled employees are frequently engaged to perform tasks with a very narrow compass. Footballers and ophthalmic surgeons are examples. Cooke J noted in Market Investigations v Minister of Social Security

[1968] 3 All ER 732

at 739,

[1969] 2 QB 173

at 187 that appointment to do a specific task at a fixed fee is not inconsistent with a contract being a contract of service. Other provisions

245. There was a fundamental disagreement between the parties as to the proper approach to the third stage of the Ready Mixed Concrete analysis.

246. Mr Tolley described the purpose of the third stage as being to test whether, notwithstanding the existence of mutuality of obligation and the existence of a sufficient right of control, the terms of the contract as a whole were inconsistent with a contract of employment. He relied on what was said by Briggs J in Weight Watchers at [42]: 42. Putting it more broadly, where it is shown in relation to a particular contract that there exists both the requisite mutuality of work-related obligation and the requisite degree of control, then it will prima facie be a contract of employment unless, viewed as a whole, there is something about its terms which places it in some different category. The judge does not, after finding that the first two conditions are satisfied, approach the remaining condition from an evenly balanced starting point, looking to weigh the provisions of the contract to find which predominate, but rather for a review of the whole of the terms for the purpose of ensuring that there is nothing which points away from the prima facie affirmative conclusion reached as the result of satisfaction of the first two conditions.

247. The Upper Tribunal in Kickabout made the same point in terms that stage three “does not proceed from what might be termed a ‘standing start’”.

248. Mr Rivett submitted that the strength of the prima facie case at this stage will vary with the level of control established at stage two and the importance of control to the nature of the work being performed. In particular, he submitted that control was less relevant at this stage in cases concerning skilled workers. He relied in his skeleton on what was said in Morren v Swinton & Pendlebury BC at p581-582: …clearly superintendence and control cannot be the decisive test when one is dealing with a professional man, or a man of some particular skill and experience. Instances of that have been given in the form of the master of a ship, an engine driver, or a professional architect, or as in this case, a consulting engineer. In such cases there can be no question of the employer telling him how to do work, therefore the absence of control and direction in that sense can be of little, if any, use as a test.

249. Mr Rivett also relied on what was said in Ready Mixed Concrete at p516-517: An obligation to do work subject to the other party's control is a necessary, though not always a sufficient, condition of a contract of service. If the provisions of the contract as a whole are inconsistent with its being a contract of service, it will be some other kind of contract, and the person doing the work will not be a servant. The judge's task is to classify the contract (a task like that of distinguishing a contract of sale from one of work and labour). He may, in performing it, take into account other matters besides control.

250. Those passages do not support the propositions put forward by Mr Rivett. What was said in Morren by Lord Parker CJ was simply that control is not decisive, which is entirely consistent with the approach outlined by Briggs J. What was said by MacKenna J in Ready Mixed Concrete was simply that control is a necessary factor but not sufficient in itself. Again, entirely consistent with the approach of Briggs J.

251. More to the point is Mr Rivett’s reliance on the decision of the Upper Tribunal in Matthews v HM Revenue & Customs

[2012] UKUT 229 (TCC)

which concerned cruise ship entertainers who contracted with various cruise lines for short term engagements. The taxpayers sought to establish that they were employees but their appeal to the FTT was dismissed. In doing so, the FTT considered the question of control. It weighed various factors including the fact that the cruise director exercised a great deal of control and said at [12]: 12. In giving weight to the various factors listed above control is the principal one relied on by the Appellants. We consider that much of this is required by the context of a cruise ship. The passengers have paid for their trip and the staff (whether employed or self-employed) are paid to serve the passengers. It is to be expected that the staff will be closely controlled so as to achieve the cruise line’s objective because the staff are in the public eye at all times. This factor seems to us to have less bearing on the employment status of the staff than might be the case if the context were different. It is not the case that self-employed have complete freedom over what they do…

252. The matter came on appeal before Mann J sitting in the Upper Tribunal, where the taxpayers argued that the FTT had failed to give proper weight to the degree of control exercised by the cruise lines and if it had done so it would have found that the taxpayers were employees. He dismissed the appeal on the following basis: 15. The characterisation of the relationship in this case is an assessment that has to take into account a number of factors. The First-tier Tribunal clearly identified those factors and their choice has not been criticised. What is criticised on analysis is the relative weight given to those factors and in particular to the relative weight given to control. It seems to me that that criticism is misplaced. 16. First, control does not have the degree of primacy which Mr Boddington's submissions give it. True it is that it is the second of three matters listed in Ready Mixed Concrete , but it is not given a determinative status there. It is a necessary but not sufficient factor. The third element of MacKenna J's formulation leaves room for a lot of other factors, and in this case those factors are those listed by the First-tier Tribunal apart from those falling within his category one. 17. Second, once that is understood, there is no apparent error in the First-tier Tribunal approach to the question of control. They weighed the control against other matters and in particular the pattern of engagements, and made their assessment. That is something they were entitled to do. It does not matter that one cannot identify what rung of the ladder control was 'relegated' to. That is not a relevant inquiry. It was considered and found to be not determinative enough. Other factors pointing the other way were more significant. In fact, the degree of control was explained away in the words (at [12]): ‘[12] … It is to be expected that the staff will be closely controlled so as to achieve the cruise line's objective because the staff are in the public eye at all times. This factor seems to us to have less bearing on the employment status of the staff than might be the case if the context were different …’ 18. That is an entirely justifiable conclusion. For example, the requirement of a certain degree of behaviour when 'off duty' and not performing is not control over the employment activities and the performer. It is a degree of control which is required because the performers are part of a community confined on a ship for days on end and in which the ship has its own standards. It is not really related to the engagement as a performer at all. The requirement to comply with the ship's regulations is probably a requirement imposed on all people on the ship; crew, passengers, entertainers and all others. The First-tier Tribunal's reasoning is, therefore, perfectly clear and perfectly justifiable. There is no error of logic, law or principle. I can detect no ground for interfering with the decision, and although it is not relevant in those circumstances, would go so far as to say that I would be very likely to have reached the same conclusion myself had I been called on to take the decision based on the material in the decision itself.

253. It does not seem to us that any of the authorities prior to Matthews explicitly considers the weight that should be given to control in the third stage. It is however clear from Matthews that weight is to be given to control at the third stage and the weight to be attached to it will depend on all the circumstances, including the nature and extent of the control which has been found to be sufficient at stage two. It is notable that all the cases talk about the existence of control “in a sufficient degree”. It is clear from that language that there may be different levels of control and it is not therefore surprising that the level of control found to exist at stage two should be taken into account in what the authorities demonstrate is a balancing exercise at stage three.

254. This approach is also consistent with what was said by Henderson J in Dragonfly Consulting Limited v HM Revenue & Customs

[2008] EWHC 2113 (Ch)

[52]On the strength of the oral evidence, the Special Commissioner was in my view fully entitled to conclude that Mr Bessell's performance of his duties was subject to a degree of supervision and quality control which went beyond merely directing him when and where to work. In the case of a skilled worker, you do not expect to find control over how the work is done. Conversely, in the case of a self-employed worker in business on his own account you would not normally expect to find regular appraisal and monitoring of the kind attested to by Mr Palmer and Miss Tooze. The weight and significance to be attached to this evidence was a matter for the Special Commissioner, and in my view it was open to him to conclude that the nature and degree of the control by the AA under the hypothetical contract was on balance a pointer towards employment.255. Mr Tolley submitted that Matthews was simply a classic example of the stage three test. It did not support Mr Rivett’s submission that mutuality of obligation and control can be found at stages one and two but taken away at stage three. However, that was not Mr Rivett’s submission. He did not suggest that there might be a finding at stage two that there is control to a sufficient degree, but a finding at stage three that there was an insufficient degree of control. The question of control is not a binary question in the sense that there is control or there is not. It is whether the control which is present is sufficient to found a contract of service, which in our view is a matter of degree.

256. It is at least common ground that when stage one and stage two are satisfied, there is prima facie a contract of employment. It appears to us that what the parties are not agreed on is the strength of that prima facie case in the circumstances of this appeal. Stage three involves a balancing exercise consistent with what was said by Briggs J in Weight Watchers . It is necessary to look at the contract as a whole. We will address that balancing exercise when we come to consider the facts of the present appeal.

257. Mr Rivett also submitted that an important factor at this stage is the presence or absence of a duty of fidelity. He submitted that such a duty is central to any employment relationship. We accept that an employment contract will expressly or implicitly contain duties such as confidentiality and non-competition. Mr Rivett’s submission, which we consider below, was that we should not construe the ITV Contracts and the BBC Contracts as employment contracts because to do so would be inconsistent with the existence of the duty of fidelity in those contracts.

[258]Long term contracts where the whole or substantially the whole of the individual’s working week is devoted to performing the services tend to suggest employment (see Usetech Ltd at [59]). Hall v Lorimer [ 1992] 1 WLR 939 ;

[1994] 1 WLR 209

was a case involving a freelance vision mixer who was found to be self-employed. At p945B Mummery J viewed as relevant the degree of continuity in the relationship, how many engagements were performed and whether they were performed mainly for one person. He also considered it useful to consider whether the person performing the services was ‘part and parcel’ of the organisation of the other party. Similarly, Nolan LJ suggested at p218C in the Court of Appeal that the extent to which the individual was dependent upon or independent of a particular paymaster and the duration of engagements may be significant. 259. It is not inconsistent with a contract of employment that the individual is free to work for others, either as an employee or in the course of self-employment (see Davies v Braithwaite

[1931] 2 KB 628

at 635; Market Investigations Ltd v Minister of Social Security

[1969] 2 QB 173

at 186G and Fall v Hitchen at 298C). Mr Tolley acknowledged that restrictions on work for third parties is not an aspect of control, but is relevant at the third stage. Cooke J stated as follows in Market Investigations at p186F: Nor is there anything inconsistent with the existence of a contract of service in the fact that Mrs Irving was free to work for others during the relevant period. 260. In Market Investigations Ltd , Cooke J suggested at p184G that the question of whether a worker is an employee could be answered by determining whether the individual who performs the services is performing them as a person in business on his own account. There is no exhaustive list of factors, but he identified a number of relevant factors at p185A-B as follows:(1) whether the worker provides his own equipment;

(2) whether he hires his own helpers;

(3) what degree of financial risk he takes;

(4) what degree of responsibility for investment and management he has; and

(5) whether and how far he has an opportunity of profiting from sound management in the performance of his task. 261. The first two factors need no explanation. Financial risk involves the ability to earn a profit or make a loss from how the work is performed. The paradigm case is where there is a fixed fee and the worker stands to lose if the work is delayed or profit if the work is done quickly (see for example Global Plant Ltd v Secretary of State for Social Security

[1972] 1 QB 139

per Lord Widgery at p152). In this context, the risk only of not being able to find alternative employment is not a relevant factor as it is a risk shared by all casual employees (see Lee Ting Sang v Chung Chi-Keung at p384D). 262. In the context of this case, Mr Tolley submitted that financial risk should not be confused with reputational risk. The same risks are faced by many employees. He also submitted that financial risk was to be considered in the context of the particular engagement, and not the activities as a whole. We accept those submissions, save that in our view financial risk in the context of the activities as a whole may be relevant to whether a worker is in business on their own account. 263. In the case of a profession or vocation the question of whether the individual is in business on his own account may not be very helpful. In such cases a significant factor may be “the extent to which the individual is dependent upon or independent of a particular paymaster for financial exploitation of his talents” ( Hall v Lorimer per Nolan LJ at p218). Conversely, an indicator of self-employment may be the extent to which the individual is able to exploit their talents in the wider market and to a number of clients. 264. Any statement within the actual contract between the worker, intermediary and client as to whether the parties intend their relationship to be one of employment may be given some weight in a borderline case. This appears to derive from Ready Mixed Concrete at p513A and was adopted by Henderson J in Dragonfly Consulting at [55]: 55. I would not, however, go so far as counsel for HMRC who submitted that, as a matter of law, the hypothetical contract required by the IR35 legislation must be constructed without any reference to the stated intentions of the parties. If the actual contractual arrangements between the parties do include statements of intention, they should in my view be taken into account, and in a suitable case there may be material which would justify the inclusion of such a statement in the hypothetical contract. Even then, however, the weight to be attached to such a hypothetical statement would in my view normally be minimal, although I do not rule out the possibility that there may be borderline cases where it could be of real assistance. 265. The Upper Tribunal in Atholl House focused at the third stage on whether the taxpayer was in business on her own account. It described its approach as follows: 79. We agree with HMRC that any analysis of whether a person is carrying on business on their own account needs to be approached with appropriate rigour. The task is not simply to accumulate impressions and test them against a pre-conceived notion of what constitutes employment. Rather, the task is to consider, at the third Ready Mixed Concrete stage, whether the taxpayer’s status as a person carrying on business on his or her own account is sufficient to displace the prima facie evaluative conclusion reached following the first two stages, that the person is an employee. However, we do not agree that the task can only be performed by reference to the contract whose status is in issue or evidence relating to the tax years in dispute. The reason why a self-employed plumber doing some work on the first day of a tax year is not an employee is to be found not just in the contractual terms and conditions governing that piece of work, but also in the continuum of that plumber’s working life over previous tax years. A conclusion that the plumber is not an employee can be sustained even without a painstaking review of every single engagement undertaken over the past few years. A similar position applies in Ms Adams’s case. If the facts demonstrate that her professional life both in the tax years in dispute, and in previous tax years, involved her carrying on a business on her own account, and if the hypothetical contract with the BBC would be regarded as entered into in the course of that business, that would be perfectly capable of supporting a conclusion that the hypothetical contract was not one of employment. 266. In relation to economic dependence, Mr Rivett pointed to what the Upper Tribunal said in Atholl House at [113]: 113. As we have noted at 111(2), the FTT concluded that Ms Adams's activities under the hypothetical contract were similar in nature to those she performed in the course of her self-employed profession. HMRC argue that the extent of Ms Adams's economic dependency on the BBC constituted a relevant difference so that the hypothetical contract was nevertheless one of employment. That difference is of potential relevance. If the hypothetical contract took up a significant amount of Ms Adams's time, or introduced a significant a degree of economic dependence on the BBC, those factors could, by analogy with the judgment in Fall v Hitchen negative the inference that she entered into that contract as part of her profession as a freelance presenter. That said, we agree with the FTT's statement at [113] of the Decision that matters such as this need to be judged by reference to an appropriately broad sample of Ms Adams's professional career rather than simply by reference to a snapshot in the two tax years in dispute. As the Master of the Rolls observed in O'Kelly , it is conceptually possible for a person to provide services to just a single customer, but to remain an independent contractor. By parity of reasoning, any economic dependence on the BBC in the particular tax years under appeal should not automatically lead to a conclusion that she would have been an employee in those years, but has to be understood in the context of Ms Adams's profession as conducted in surrounding tax years. 267. The Upper Tribunal in Atholl House found that whilst there was mutuality of obligation and a sufficient framework of control, the taxpayer was in business on her own account and that this displaced the prima facie conclusion that there was a contract of employment. 268. The absence of terms for holiday pay, sick pay or pension entitlements does not necessarily indicate that the hypothetical contract is not one of employment. The actual contract would not have contained such terms because it was entered into between the client and the intermediary and not the individual worker. It will carry little if any weight (see Atholl House at [74] and Kickabout at [92]). 269. As mentioned above, Mr Rivett referred us to the facts of a number of the authorities. He started with one of the earliest cases, Davies v Braithwaite which involved an actress who appeared in films, stage plays, on the radio and on records. Unsurprisingly, she was held to be self-employed and having a series of engagements in the course of exercising her profession. The engagements could not be considered to be separate contracts of employment. 270. In Ready Mixed Concrete , MacKenna J was concerned with delivery drivers working for a company selling concrete. The drivers were required to comply with the conditions of their licences and other rules and regulations. The driver was required to make the vehicle available to the company at all times of the day or night and could not operate as a haulier of goods except under the contract. The company could require the driver to operate the vehicle himself on any day up to the maximum number of hours permitted by law. However, the driver could, with the company’s consent, appoint a competent driver to operate the truck in his place. 271. MacKenna J considered the third stage of his test to be the most important one on the facts of the case. He stated his conclusion at p525G onwards. In particular: It is now time to state my conclusion, which is that the rights conferred and the duties imposed by the contract between Latimer and the company are not such as to make it one of service. It is a contract of carriage. I have shown earlier that Latimer must make the vehicle available throughout the contract period. He must maintain it (and also the mixing unit) in working order, repairing and replacing worn parts when necessary. He must hire a competent driver to take his place if he should be for any reason unable to drive at any time when the company requires the services of the vehicle. He must do whatever is needed to make the vehicle (with a driver) available throughout the contract period. He must do all this, at his own expense, being paid a rate per mile for the quantity which he delivers. These are obligations more consistent, I think, with a contract of carriage than with one of service. The ownership of the assets, the chance of profit and the risk of loss in the business of carriage are his and not the company's. If (as I assume) it must be shown that he has freedom enough in the performance of these obligations to qualify as an independent contractor, I would say that he has enough. He is free to decide whether he will maintain the vehicle by his own labour or that of another, and, if he decides to use another's, he is free to choose whom he will employ and on what terms. He is free to use another's services to drive the vehicle when he is away because of sickness or holidays, or indeed at any other time when he has not been directed to drive himself. He is free again in his choice of a competent driver to take his place at these times, and whoever he appoints will be his servant and not the company's. He is free to choose where he will buy his fuel or any other of his requirements, subject to the company's control in the case of major repairs. This is enough. It is true that the company are given special powers to ensure that he runs his business efficiently, keeps proper accounts and pays his bills. I find nothing in these or any other provisions of the contract inconsistent with the company's contention that he is running a business of his own. A man does not cease to run a business on his own account because he agrees to run it efficiently or to accept another's superintendence. 272. Mr Rivett pointed to the particular facts that the drivers contractually agreed to comply with all relevant rules and regulations, and also had to get the approval of the company in relation to any substitute driver. We have already dealt with that submission. 273. Mr Rivett referred us to Market Investigations in the context of whether a worker is in business on their own account. That case concerned interviewers working for a market research company. The Minister of Social Security had held that the worker was an employee for national insurance purposes. Each engagement gave rise to a series of separate contracts of service. In dismissing the company’s appeal, Cooke J found that the company had extensive control over the worker, and that looking at the contract as a whole the worker was not in business on her own account and that it was not inconsistent with a series of contracts of service. It is clear that Cooke J regarded the test of whether the worker was in business on her own account was an important factor. He described it as follows: The observations of Lord Wright, of Denning L.J. and of the judges of the Supreme Court suggest that the fundamental test to be applied is this:

“Is the person who has engaged himself to perform these services performing them as a person in business on his own account?”

If the answer to that question is “yes,” then the contract is a contract for services. If the answer is “no,” then the contract is a contract of service. No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of the considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases. The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor; and that factors which may be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task. 274. In Lee Ting Sang at p382, the Privy Council said that the matter had never been better put than by Cooke J in this passage. 275. Hall v Lorimer concerned a vision mixer working for a number of production companies pursuant to short term contracts. He used very expensive equipment belonging to the production companies and worked at studios owned or hired by the production companies. On six occasions he provided a substitute to carry out work he had contracted to do. The Inland Revenue accepted that the most useful test in the circumstances was that stated by Cooke J in Market Investigations , namely whether he was in business on his own account. 276. Nolan LJ giving the judgment of the Court of Appeal at p216E endorsed the following view expressed by Mummery J in that case: In order to decide whether a person carries on business on his own account it is necessary to consider many different aspects of that person's work activity. This is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another. The process involves painting a picture in each individual case. As Vinelott J said in Walls v Sinnett (Inspector of Taxes)

[1986] STC 236

at 245:

“It is, in my judgment, impossible in a field where a very large number of factors have to be weighed to gain any real assistance by looking at the facts of another case and comparing them one by one to see what facts are common, what are different and what particular weight was given by another tribunal to the common facts. The facts as a whole must be looked at, and a factor which may be compelling in one case in the light of the facts of that case may not be compelling in the context of another case. 277. He went on to say at 218C: Again the question whether the individual is in business on his own account, though often helpful, may be of little assistance in the case of one carrying on a profession or vocation. A self-employed author working from home or an actor or a singer may earn his living without any of the normal trappings of a business. For my part I would suggest there is much to be said in these cases for bearing in mind the traditional contrast between a servant and an independent contractor. The extent to which the individual is dependent on or independent of a particular paymaster for the financial exploitation of his talents may well be significant. It is, I think, in any event plain that Cooke J was not intending to lay down an all-purpose definition of employment. For example, his test does not mention the duration of the particular engagement or the number of people by whom the individual is engaged. Cooke J said that he took account of the fact that the lady concerned was free to work as an interviewer for others but added that there was no finding that she did so (see [1968] 3 All ER 732 at 740 , [1969] 2 QB 173 at 188 ). This is of little assistance in the present case, of which the most outstanding feature to my mind is that the taxpayer customarily worked for 20 or more production companies and that the vast majority of his assignments, as appears from the documentary evidence, lasted only for a single day. 278. Finally, i t is not appropriate to adopt a mechanistic or ‘check list’ approach. Different factors will have difference significance and weight in each case. Having considered all the relevant factors, it is necessary to stand back from the detail and make a qualitative assessment of the facts as found (see Hall v Lorimer per Nolan LJ at p216, approving the views of Mummery J in the High Court). Consideration of the issues 279. We must now apply these principles to the various hypothetical contracts and our findings of fact as to the circumstances in which they arose. There is an issue between the parties as to the relevance of circumstances and arrangements before and after the particular tax years with which we are concerned. Mr Rivett submitted that to form a view on the some of the factors relevant for the purposes of applying the principles requires consideration of an appropriately broad sample of the individual’s career (see Atholl House at [79] and [113] quoted above). The relevant circumstances include other work done by Mr Chiles before, during and after the contractual period under consideration. Mr Tolley submitted that was not appropriate and indicated that this was one of the issues to be considered by the Court of Appeal in Atholl House . Whilst the issue may go further, for present purposes we are bound by the decision of the Upper Tribunal in Atholl House . 280. We shall consider the parties submissions on the facts by reference to the established three stage test. (1) Mutuality of Obligation 281. We can deal with mutuality of obligation quite briefly in light of our analysis of the authorities. 282. It is common ground that there was mutuality of obligation in relation to the BBC Contracts. The issue at this stage arises solely in relation to the ITV Contracts. Mr Tolley suggested that BBL’s acceptance that there was mutuality in relation to the BBC Contracts but not the ITV Contracts was illogical and that there were no material differences between the two. It is not necessary for us to determine whether that is right, and we shall therefore focus on the ITV Contracts. 283. Mr Rivett submitted that there can be no mutuality of obligation in circumstances where ITV had no obligation to call upon Mr Chiles’ services or to provide him with work and had specifically refused to agree to such an obligation in negotiations for the First ITV Contract. Mr Chiles had been concerned that ITV might go off him and not use him as a presenter. It is important for a television presenter to be seen on television in order to maintain their profile. However, ITV would not agree to any obligation to use Mr Chiles. Both parties envisaged that ITV might not require Mr Chiles to work and the Guaranteed Service Fee would be paid in circumstances where no work was provided. 284. Mr Rivett further submitted that the First ITV Contract had been carefully drafted from ITV’s perspective to ensure that there was no obligation on ITV to provide Mr Chiles with work. If no work was offered, then Mr Chiles could terminate the contract and work for other broadcasters. 285. We have set out above our views based on the authorities as to what is required to establish mutuality of obligation. We accept that the present appeal concerns what may be viewed as overarching contracts and that there are no discrete contracts. However, we are not concerned with a situation where there are periods where Mr Chiles was not provided with work by ITV. The fact is that ITV did call on Mr Chiles to provide his services throughout the ITV Contracts, at least in relation to the Football Programme Services. The circumstances fall within the proposition described by the Court of Appeal in PGMOL at [118(iii)]. Work which was offered was in fact done for payment. Whilst there was no obligation on ITV to offer work, it was anticipated that it would offer work and it made payment for the work which was done. In our view the ITV Contracts involved work-related obligations on both ITV and Mr Chiles so that they are properly characterised as involving mutuality of obligation in the relevant sense. 286. The ITV Contracts fall fairly and squarely within the principles described by Langstaff J in Cotswold Developments and by Elias J in James . There is some obligation on Mr Chiles to work, and some obligation on ITV to provide or pay for it. The obligations under the ITV Contracts are clearly located “in the employment field”

. They relate to the provision of and payment for work which must be personally performed by Mr Chiles. 287. This is also consistent with Usetech Ltd where Park J stated at [64]:

[64]… It is only where there is both no obligation to provide work and no obligation to pay the worker for time in which work is not provided that the want of mutuality precludes the existence of a continuing contract of employment. 288. In the circumstances, we are satisfied that the ITV Contracts involved mutuality of obligation and the first stage of the test is satisfied for the ITV Contracts and the BBC Contracts. (2) Control 289. We now consider whether each of the contracts involved a sufficient framework of control to constitute contracts of employment. We are concerned with whether ITV and/or BBC had a sufficient framework within which they could control what was to be done by Mr Chiles, where it was to be done, when it was to be done and how it was to be done. It is necessary for us to look at the contracts separately. We shall do so by reference to the hypothetical ITV Contracts and the hypothetical BBC Contracts. Before doing so we shall make some general observations. 290. What matters is control over Mr Chiles in the performance of his services. It is important to bear in mind what services Mr Chiles had agreed to perform. He had agreed to provide his services not as a presenter generally, but as the presenter of specific television and radio programmes. 291. We have previously referred to Mr Rivett’s submission that where the parties agree in the contract what work is to be done, no relevant right of control can be identified from the fact that the worker can be required to do that work. He submitted that there is a logical and legal distinction between control exercised by both parties entering into the contract and control exercised under the contract. Where the parties set out detailed provisions as to how the contract will work there is less scope to establish control at this stage. He submitted, for example that compliance with Ofcom rules and BBC Editorial Guidelines was “baked in to the nature of the services”. 292. We accept that what is important is control exercisable as a result of the contractual relationship between the parties. In other words, the control must be derived from the contract, either the express terms or by implication. Further, we accept the broad proposition that the definition of the services to be provided may affect the extent to which there is control. If the services to be provided are defined in detail there may be less scope for the client to exercise control over what is done, where it is done, when it is done and how it is done. Much will depend on the nature of the services being provided and the context in which they are provided. 293. For example, Mr Chiles contracted to provide his services presenting ITV’s live football coverage. It is common ground that he could not be required to present highlights programmes until the First ITV Contract was varied. The fact ITV could not require him to do this was a result of the way in which the services were defined. However, the absence of control in this respect says little if anything about ITV’s control over Mr Chiles in his performance of the services he had agreed to provide. 294. We do not agree with Mr Rivett’s suggestion that because Mr Chiles was agreeing to present programmes in accordance with Ofcom rules or BBC Editorial Guidelines, the broadcasters’ control in that regard was irrelevant. What is relevant is control of Mr Chiles in the performance of his services as a presenter pursuant to the contract. In our view, those services are properly considered to be the services of a presenter, with the rules and guidelines defining the way in which the services are to be provided rather than the services themselves. 295. The contracts in this case specifically define what services Mr Chiles might be required to perform. They are the services of a presenter on specific television and radio programmes. Given the specific definition of the services, there was little scope for the broadcasters to control or direct what Mr Chiles could be required to do. That can be contrasted with an individual simply contracting to provide services for a set number of hours per week. In that case, it may be easier to establish the requisite control. For example, a right to direct the individual as to what, when, where and how the services are to be provided. In the present case there were clearly no rights on the part of the broadcasters to direct Mr Chiles to present different types of programmes at significantly different times or on different days. 296. HMRC place considerable reliance on fact that Mr Chiles was under the editorial control of ITV and the BBC. In particular, in the case of ITV he was required to comply with the Ofcom rules and in the case of the BBC with Ofcom rules and the BBC Standards and Editorial Guidelines. 297. Realistically, it would ordinarily be viewed as part of the role of any television or radio presenter to act in accordance with Ofcom rules and the broadcaster’s editorial guidelines. Some presenters might have more or less editorial input than others. In the present case, editorial control clearly lay with the broadcasters. In our view editorial control of the programme, including the form and content of the programme and where necessary the right to require particular language to be used by the presenter, to interview a particular guest or to require the presenter to move to a commercial break, is a relevant and important element of control for these purposes. The Upper Tribunal has taken the same view in other cases. For example, in Atholl House at [105] quoted above. 298. Such control may exist more in principle than in practice. During a programme there is limited scope for instruction. More generally, Mr Chiles has a particular way of presenting and engaging with the audience which is why he was engaged by ITV and the BBC. It would not make sense for the broadcasters to try and change his style. Any editorial disagreements would be resolved collaboratively. Ultimately, ITV was entitled to require Mr Chiles to take account of any reasonable comments. The BBC was entitled to require Mr Chiles to comply with all objectively reasonable requests in connection with the services he provided. 299. The role of a presenter in the programmes Mr Chiles was presenting does not simply involve turning up at the studio or location to present the programme. The presenter must be involved in the pre-production process. The contracts in the present case did not require Mr Chiles to attend at specific locations and times to prepare for the programmes. The First ITV Contract required his attendance at rehearsals and pre- and post-production meetings on mutually agreed dates and subject to prior professional commitments. In the Second ITV Contract it was required that he should be invited to and attend such production meetings as may reasonably be required by ITV. In the BBC Contracts, Mr Chiles would be required to comply with all objectively reasonable requests which we consider would include attendance at pre-production meetings. 300. The authorities show that there is less scope for control in the case of skilled persons. What is relevant is control so far as there is scope for such control. It is not necessary to have control in the sense of power to micro-manage the way in which the services are provided. In other words it is not necessary to have “the granular mechanics of control” described in Christa Ackroyd Media . In the present context we would include within the description of granular control what Mr Tolley described as “control at the moment of performance”. Hence, the power of ITV or BBC to require Mr Chiles to ask certain questions or to approach an interview in a certain way bears very little weight in this analysis. 301. Mr Tolley submitted that the fact Mr Chiles was an employee of BBL is also relevant to the question of whether there was a sufficient framework of control. It is said to establish as a matter of principle that a right of control is possible. Further, the arrangement between BBL and Mr Chiles is part of the circumstances which must be taken into account for the purposes of s 49(1)(c). HMRC also point to the fact that there are many terms in the ITV Contracts and the BBC Contracts which require BBL to procure Mr Chiles to do certain things. It is said that for BBL to comply with the contracts, BBL must have been entitled to control the services of Mr Chiles. 302. We are satisfied that Mr Chiles was an employee of BBL. BBL warranted in clause 10 of the First ITV Contract that Mr Chiles was its employee. Further, in the Inducement Letter Mr Chiles warranted, to the best of his knowledge and belief, the truth of all matters on which BBL had itself given a warranty. The structure of the contracts is consistent with Mr Chiles, in his capacity as a director of BBL, agreeing to enter into the contracts with ITV and then in his capacity as an employee of BBL performing the services of a presenter. There is no evidence that Mr Chiles’ status as an employee of BBL changed at any time after the First ITV Contract. Mr Chiles readily accepted in cross-examination that he was an employee of BBL. 303. However, we do not consider that Mr Chiles’ status as an employee of BBL really assists in determining whether there would be a sufficient framework of control pursuant to the hypothetical contracts to constitute Mr Chiles an employee of the broadcasters. We must focus on the terms of the hypothetical contracts in determining whether the necessary framework of control is present. 304. With these observations in mind we turn to consider the hypothetical contracts themselves and the surrounding circumstances. ITV Contracts 305. The ITV Contracts required Mr Chiles to present its live football coverage and highlight programmes. The programmes were to be aired on dates and times chosen by ITV to fit in with the fixture lists of the relevant competitions. The choice of which matches to cover was akin to a matter of editorial control for ITV. We have already identified that editorial control is an important factor. In our view, the fact that ITV could require Mr Chiles to present the programmes on those days and at those times carries no further weight in determining whether there was a sufficient framework of control for these purposes. 306. ITV had some limited control in the sense that they could require Mr Chiles to attend rehearsals and pre-production meetings on mutually agreed dates. They had no control over when and where Mr Chiles carried out his research or other preparation for his appearances. 307. We acknowledge that ITV generally had no “in the moment” control over how the services were performed, but that is a feature of all forms of skilled work. ITV through the programme editor had authority and responsibility in relation to production matters and content, including the running order. The editor could direct Mr Chiles as to the timing of commercial breaks and public apologies. 308. It is significant that ITV could require Mr Chiles to take account of their reasonable comments in the performance of his services and that ITV would have final editorial control over the programmes. ITV were required to ensure compliance with Ofcom rules and were entitled to ensure that Mr Chiles provided his services in accordance with those rules. 309. Taken together, we consider that these terms gave ITV a significant measure of control as to how Mr Chiles performed his services. 310. Overall, we are satisfied that there was a sufficient framework of control to constitute Mr Chiles, prima facie, an employee of ITV pursuant to the hypothetical ITV Contracts. The BBC Contracts 311. Mr Chiles agreed to present specific radio programmes for the BBC. The programmes were to be aired on specific days and broadly at specific times. The fact that the BBC could require Mr Chiles to present those programmes on those days and at those times does not indicate that the BBC had control as to when and where Mr Chiles should provide his services. The BBC could not require Mr Chiles to provide his services at any other time or place, although we accept there was provision for the BBC to require Mr Chiles to attend at such times and places as the BBC should deem reasonably necessary. It seems to us that the latter provision would fall to be narrowly construed in the context of the programmes Mr Chiles had agreed to present, but it does at least give the BBC some element of relevant control over Mr Chiles in the performance of his services. 312. The Second and Third BBC Contracts also required Mr Chiles to undertake promotional activities in connection with the programmes as reasonably requested by the BBC. Again, this was part of the services Mr Chiles agreed with the BBC that he would provide. It is not a factor indicating that the BBC had control over what Mr Chiles would do in the performance of his services. These were the very services he had agreed to perform. 313. We acknowledge that the BBC generally had no “in the moment” control over how the services were performed, but that is a feature of many forms of skilled work. The BBC through the programme editor had authority and responsibility in relation to production matters and content, including the running order. The editor could direct Mr Chiles as to the timing of public apologies or as to the language to be used where a script had been legally approved. 314. It is significant that the BBC could require Mr Chiles to comply with objectively reasonable requests in the performance of his services and that the BBC would have final editorial control over the programmes. The BBC were required to ensure compliance with Ofcom rules and were entitled to ensure that Mr Chiles provided his services in accordance with those rules. They were also entitled pursuant to the BBC Contracts to require Mr Chiles to comply with BBC Standards and Editorial Guidelines. 315. There was express provision whereby the BBC could require Mr Chiles to avoid specific remarks or interjections. They could require Mr Chiles to comply with all objectively reasonable requests in connection with the services. 316. Taken together, we consider that these terms gave the BBC a significant measure of control as to how Mr Chiles performed his services. 317. Overall, we are satisfied that there was a sufficient framework of control to constitute Mr Chiles, prima facie, an employee of the BBC pursuant to the hypothetical BBC Contracts. (3) Other provisions and factors 318. At this stage we take into account that there is mutuality of obligation in relation to all the hypothetical contracts and a sufficient framework of control to establish a prima facie case that Mr Chiles would be performing his services as an employee. 319. We have found that the broadcasters do have a sufficient measure of control to establish a prima facie case that there is a contract of employment. However, we do not consider that the extent of the broadcasters’ control in either case is a compelling factor. Essentially, we must consider whether there are other provisions of the contracts or other factors which displace the prima facie case and require a conclusion that the contracts are contracts for services rather than contracts of employment. 320. In our view the most significant factor that might displace the prima facie case that Mr Chiles was an employee under the hypothetical contracts is whether he was in business on his own account. But only if the hypothetical contracts can properly be seen as part of that business. That is the approach taken by the Upper Tribunal in Atholl House and in other cases. It involves a value judgment and will depend on various factors which will carry different weight in the overall analysis 321. Mr Rivett’s principal case was that Mr Chiles was in business on his own account and he submitted that the evidence in support of that case was overwhelming. 322. The position is slightly more nuanced than that. As a matter of fact, Mr Chiles was not in business on his own account at any stage. He was an employee of BBL throughout the period after 1996. However, it seems to us that for present purposes we must consider whether work done by Mr Chiles through BBL would, if it had been done by Mr Chiles on his own account, give rise to a conclusion that he was in business on his own account. Neither party suggested that we should adopt any different approach. 323. Mr Tolley pointed out that BBL bears the burden of establishing that Mr Chiles should be treated as being in business on his own account. He submitted that there was a lack of documentary evidence which meant that we should not make any finding that Mr Chiles was in business on his own account. In particular, we could not assume that any other contracts entered into by BBL would themselves not subject to IR35. 324. We agree with Mr Tolley that we are not in a position based on the evidence and submissions before us to make any findings in relation to the status of the First ITV Contract so far as it relates to Daybreak or as to work done for the BBC on long-standing programmes such as Match of the Day 2 and The One Show. However we do consider that we have sufficient evidence from Mr Chiles to form a conclusion as to the nature of his other work, including work done for the BBC through independent production companies. 325. In relation to BBL’s other work, Mr Chiles’ evidence was not challenged. We infer on the basis of our findings of fact that Mr Chiles’ other work would not be considered that of an employee. We agree with Mr Rivett that Mr Chiles should be treated as being in business on his own account in all the tax years under consideration. The real question is whether the hypothetical contracts were entered into as part of that business, or whether they should properly be viewed as contracts of employment separate to the business. 326. The principal factors which in our view establish that Mr Chiles was in business on his own account may be summarised as follows:(1) Since at least 2001, Mr Chiles had provided his services as a broadcaster and journalist to a significant number of clients. We have described the extent of this work in our findings of fact. Some of that work was one-off, in the sense that it related to one-off programmes. Some related to short series of programmes. The work was wide in its scope, including not just presenting programmes and writing newspaper articles and columns, but also appearing in commercials, presenting awards at award ceremonies and speaking at commercial conferences.

(2) Mr Chiles had a significant number of clients. In the period 1996 to 2019 he contracted with nearly 100 different third parties.

(3) In addition to this work, Mr Chiles undertook work on other commercial projects which did not bear fruit and turned down other work including television appearances. We are satisfied that in the period from 2007 onwards when Avalon was appointed Mr Chiles was building a reputation and a career working through BBL.

(4) Avalon was appointed to act as Mr Chiles’ agent. Their role was to act as his management company in all areas of the entertainment industry. They were to use their best endeavours to promote and further Mr Chiles’ career and reputation in the entertainment industry. Mr Chiles paid Avalon a fee of 15% of his income from the entertainment industry.

(5) In September 2007 Mr Chiles engaged a personal assistant to manage his diary and to liaise with Avalon, the BBC and his other clients. The personal assistant was self-employed and in the period 2012 to 2017 Mr Chiles paid her on average £15,900 per year.

(6) In 2009 Mr Chiles and Avalon were looking to produce a factual entertainment show which Mr Chiles would present and which was pitched to the BBC. The BBC commissioned a pilot, but the show was not adopted. It was later adopted by ITV. Mr Chiles had helped to create the format and was a co-producer entitled to a share of the production profits. He was ultimately engaged by Avalon to present the programme.

(7) Throughout the relevant tax periods Mr Chiles continued to seek and obtain other work apart from his work under the ITV Contracts and the BBC Contracts. He entered into 40 separate agreements with some 25 different third parties.

(8) The income earned by Mr Chiles in the period 2012 to 2017 excluding his income as a presenter for ITV and the BBC under the hypothetical contacts was some £350,000. We have described the sources of that income in our findings of fact and some two thirds of it was earnings from Avalon in relation to That Sunday Night Show. There was very little other income in tax year 2013-14, although the reason for that is not clear. 327. Mr Tolley invited us to treat the engagement of Avalon by Mr Chiles as his agent as a neutral factor. He submitted that employees in the entertainment and sporting fields might have agents whilst self-employed individuals might not have agents. We accept that the whole purpose of s 352 ITEPA 2003 is to allow certain employees in the entertainment industry to obtain tax relief for the costs of employing an agent. We note that HMRC contend that this relief would not be available to Mr Chiles because he is not an entertainer. 328. We do not agree that employing an agent is a neutral factor. In our view it points towards Mr Chiles being in business on his own account. It is certainly not decisive, far from it, but in our view it is a factor which indicates self-employment. Employees do not generally give up 15% of their employment income to an agent. We have no evidence as to how common it might be for employees in the broadcasting industry to engage agents. As to employees generally, we were given the example of professional footballers as a category of employees who engage agents. Whilst it is not unheard of for employees to engage agents, it must be viewed generally as an exception rather than the rule. 329. Similarly, in relation to BBL’s expenditure on a personal assistant. Mr Tolley submitted in this context that we should distinguish expenditure as a matter of choice and expenditure necessary in the performance on the contract. He submitted that the fact Mr Chiles paid for administrative support was a matter of choice and a neutral factor. We do not consider that there is much significance in the fact Mr Chiles engaged a personal assistant as a matter of choice rather than necessity. If it was a matter of necessity and Mr Chiles was not reimbursed by ITV or the BBC then that would certainly point to self-employment. However, even where it is a matter of choice we consider it is indicative of self-employed status. Employees do not generally engage the services of an assistant at their own expense to better perform their duties. 330. Looking at Mr Chiles’ activities as a whole we consider that Mr Chiles was at least able to benefit from sound business management. He had engaged Avalon to manage his activities and a personal assistant to manage his diary and his contacts. These were commercial decisions involving significant costs. They could have positive or negative effects financially. Clearly, he was hoping that it would help to maximise the income from his activities, putting to one side for the moment that his activities might include income from employment opportunities. 331. Overall it is clear that throughout the period from at least 2007 onwards, Mr Chiles through BBL was building a business. Avalon was helping him to build that business. 332. We must now consider whether the hypothetical contracts are separate contracts of employment with ITV and BBC, or whether they should be seen as part of Mr Chiles’ business. At this stage, there are factors which point both ways. The authorities contain guidance on this issue which we have outlined above. These factors must be taken together with the existence of the necessary mutuality of obligation and the sufficient framework of control which we have held constitute the hypothetical contracts as prima facie contracts of employment. We must consider these matters in the round, standing back and taking an overall view of the situation. 333. We note that the contracts involved Mr Chiles working for competing broadcasters at the same time. He presented live football programmes for ITV and news and sports radio programmes for the BBC. Considerable research and preparation for both ITV and BBC was carried out at the time and place of his choosing. Mr Chiles also provided some of the tools and resources required for the better performance of his duties. These are matters which in our view point to the ITV and BBC Contracts being part of the business he was conducting on his own account, albeit not strongly. 334. HMRC rely on a number of factors which they say are consistent only with the hypothetical contracts being properly regarded as contracts of employment rather than as part of Mr Chiles’ business. 335. It is said that Mr Chiles’ services were integrated into the businesses of ITV and BBC. We do not consider that is correct. He was an integral part of the programmes on which he appeared, but beyond that he was not integrated into their businesses. 336. Reliance was placed on the absence of any right of substitution. There was an express prohibition on providing a substitute presenter in the hypothetical ITV Contracts and for the reasons we have given no right to provide a substitute in the hypothetical BBC Contracts. We consider that this reflects the nature of the industry in which Mr Chiles was operating. His business did not involve supplying presenters. It involved supplying his own services as a presenter. The absence of rights to provide a substitute does not indicate that these contracts were outside Mr Chiles’ established business activities. 337. HMRC relied on the fact that Mr Chiles was not exploiting a brand in the sense of intellectual property rights. Mr Tolley submitted that the concept of Mr Chiles having a brand, referred to as such by the witnesses, may also be viewed as Mr Chiles having a career in broadcasting. We accept that is the case. However, what is significant is Mr Chiles’ reputation as a broadcaster and journalist with third parties. In the same way that a business might exploit a brand, Mr Chiles could exploit his skills and reputation by way of business, or indeed by way of employment. In our view it is a neutral factor. 338. HMRC also relied on restrictions in the contracts, principally the ITV Contracts limiting Mr Chiles’ right to work for third parties. It was said that restrictions in the ITV Contracts were consistent with employment but that the absence of restrictions in the BBC Contracts was a neutral factor. There is little in the authorities as to the significance of such restrictions. In our view, the restrictions in the hypothetical ITV Contracts and the absence of restrictions in the hypothetical BBC Contracts say little if anything about the status of Mr Chiles. ITV would have a legitimate interest in protecting their football broadcasting rights whether Mr Chiles was an employee or a self-employed contractor. Equally, we accept that a contract of employment will not necessarily involve exclusivity, especially when the employment is part-time. 339. As mentioned above, Mr Rivett submitted that the contracts could not be contracts of employment because Mr Chiles would owe conflicting duties of fidelity to both ITV and the BBC in the periods when he had contracts with both broadcasters. We do not accept that there was any real conflict on the facts. Mr Chiles was presenting ITV’s football coverage whilst at the same time presenting a news and sport radio programme for the BBC. The fact that his radio programme might involve and did involve some discussion of football matches which were being covered by ITV does not in our view give rise to any real conflict or likely breach of any duty of fidelity. Both broadcasters were content for Mr Chiles to appear on the other platform. 340. The most significant factors relied upon by HMRC were: (1) The duration of the contracts, (2) The contribution the contracts made to Mr Chiles’ income, and (3) The absence of financial risk in performing the contracts. 341. The ITV Contracts were for three years, extendable to four years, and two years respectively. The BBC Contracts were for one year, eighteen months and three years respectively. The length of the contracts does in our view indicate that they were contracts of employment rather than part of Mr Chiles’ business. However, it is notable that the contracts were not what might be called full-time contracts. 342. In relation to the provision of the Football Programme Services for ITV, the First ITV Contract required Mr Chiles to present 48 matches a year together with coverage of World Cup and European Championship finals and occasional highlights programmes. There were also incidental services in connection with those matches but it was work which Mr Chiles could combine with other work commitments. Notably, presenting Daybreak 5 days a week for 40 weeks a year in the first year of the First ITV Contract. We infer that the commitment in relation to the Football Programme Services throughout the ITV Contracts constituted considerably less than half of Mr Chiles’ working time. 343. The same can be said in relation to the BBC Contracts. The First BBC Contract involved Mr Chiles presenting on one day a week for 42 weeks a year, considerably less than half Mr Chiles’ working time. The Second and Third BBC Contracts each involved approximately two days a week, again less than half Mr Chiles’ working time. 344. In the circumstances we consider that the significance to be attached to the length of the ITV Contracts is diminished. 345. Mr Chiles clearly had time over and above his commitments under the ITV Contracts and the BBC Contracts to conduct his business. We have set out above the income he derived from his business in the relevant tax years and the nature of the work he was carrying out in those years. It is not uncommon for businesses to have a small number of good, long-standing clients who effectively form the backbone of a business, a factor which we have noted was recognised by the Upper Tribunal in Atholl House at [113] quoted above. 346. HMRC’s income analysis shows that the ITV Contracts and the BBC Contracts certainly comprised the bulk of Mr Chiles’ income in the relevant tax years. Mr Tolley submitted that ITV and BBC were a source of consistent, regular and predictable income for Mr Chiles, which we accept. 347. We have set out above HMRC’s income analysis and BBL’s income analysis which removes the income from Daybreak. In evaluating the significance of the income analysis we consider that it is appropriate to take out the income received from Daybreak, but for the reasons given above it is not appropriate to treat the income from Daybreak as “Other Income”. We do not know whether it would be regarded as income from employment or self-employment. On that basis, BBL’s table can be re-stated as follows: Tax Year Total Income £ ITV Income % BBC Income % Other Income % 2012-13 1,323,399 82.2 0 17.8 2013-14 931,740 97.7 2.3 0 2014-15 798,210 88.4 8.0 3.6 2015-16 138,293 0 74.6 25.4 2016-17 191,857 0 74.3 25.7 348. Income from the ITV Contracts comprised more than 80% of BBL’s overall income in the first three years. In the last two years, income from the BBC Contracts comprised approximately 75% of BBL’s income. In our view this is a factor supporting the prima facie case that the ITV Contracts and the BBC Contracts were contracts of employment. Again however, it is not uncommon for a business to have individual clients contributing a large proportion of turnover. In this case it is not one client doing so, but one client doing so in the first three years and being replaced with another client in the latter two years. The figures also reflect the fact that the ITV Contracts were particularly lucrative for Mr Chiles and were entered into when he was at the height of his career to date. 349. It is true that the contracts themselves did not involve financial risk in the sense that there was no prospect of Mr Chiles suffering a loss on the contracts themselves. The contracts were essentially for fixed fees over the terms of the contracts. Mr Chiles was not in a position to profit from sound management in the performance of the individual contracts. The contracts did not require any significant investment in capital. Clearly there were circumstances in which the fees would not be paid, but that was only in the case of a breach of contract by Mr Chiles. The risk of not being able to find work at the end of a fixed-term contract is a risk shared by all employees. 350. We have accepted Mr Chiles’ evidence that he considered that he was “at risk” throughout his career once he left his employment at the BBC in 1996. His reputation rose and then fell. Every time he presented a programme his reputation was at risk. However, this is the sort of risk that applies to every presenter, whether they are employed on a fixed-term contract or as a self-employed contractor. 351. However, it seems to us that the absence of financial risk in the performance of the hypothetical contracts arises from the nature of the services Mr Chiles was supplying. He was providing his own services as a professional television and radio presenter. Whether the contracts were contracts of service or contracts for services they were unlikely to involve any financial risk, save that he would not be paid if he was not ready and willing to provide his services. 352. Mr Chiles had a number of clients in his existing business. It is notable that he was working for both ITV and BBC at the same time in the period November 2013 to May 2015. The services provided by Mr Chiles for ITV and BBC fell fairly and squarely within the scope of his existing business activities. In relation to ITV, Mr Chiles was also involved co-producing That Sunday Night Show on behalf of ITV, which we are satisfied was part of his existing business. 353. As we have said, Mr Chiles could profit from sound business management of his activities generally. He conducted his activities in a business-like manner. The Avalon Agreement applied to his income from the hypothetical contracts in the same way as it applied to his other work. Mr Chiles’ personal assistant helped him to better perform his duties under the hypothetical contracts as she did in relation to his other work. 354. We must stand back and look at the circumstances as a whole. Those circumstances include the prima facie existence of a contract of employment given the existence of mutuality of obligation and a sufficient framework of control. We take into account the nature and extent of the framework of control we have found to exist. We also take into account the nature and extent of the business which we have found Mr Chiles is to be treated as conducting on his own account. In all the circumstances we consider that Mr Chiles is to be treated as entering into the hypothetical contracts as part and parcel of that business. They were contracts for services and not contracts of employment. We conclude therefore that the condition in s 49(1)(c) ITEPA 2003 is not satisfied in relation to the ITV Contracts or the BBC Contracts in any of the relevant tax years. 355. In reaching that conclusion we have not given any weight to the expressed intention of the parties in the BBC Contracts that they would not constitute Mr Chiles an employee of the BBC. Conclusion 356. For all the reasons given above we allow the appeal. Right to apply for permission to appeal 357. This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. JONATHAN CANNAN TRIBUNAL JUDGE Release date: 09 FEBRUARY 2022 Annex 1 Hypothetical First ITV Contract 1. Mr Chiles would personally provide his services to ITV. 2. The contract would be for a term of 3 years from 1 June 2010 to 31 May 2013. Mr Chiles would be entitled to extend the term of the contract by an additional year in the event that ITV acquired rights to broadcast at least 16 Champions League matches in the 2013-14 season. 3. Mr Chiles would provide services of significa n t creative and distincti v e in p ut appearin g as lea d p resenter on fo o tball pr o grammes. T he foot b all pr o grammes wo u ld be the li v e coverage on ITV1 of a maxim u m of 4 8 matches in various competitions together with all matches covered on ITV1 at the World Cu p 2010 and Euro 201 2 matches. He would also appear as a presenter of h ighlights programmes. 4. Mr Chiles would provide the following incidental services: (1) Promotional services of up to 6 days per contract year. (2) Contributions to ITV websites in the form of 10-15 minute post-match interviews and reaction. (3) Attendance at rehearsals, pre-and post-production work and meetings at the reasonable request of ITV on mutually agreed dates and subject to Mr Chiles’ prior professional commitments. 5. Mr. Chiles would research and keep up to date with fo o tball n ews so as to be able to carry out the services in accordance with good practice and all applicable laws and regulatory standards, including the Ofcom rules. He would exercise such skill, dili g ence, prudence, experience, expertise, foresi g ht and jud g ement as wo u ld be expected from a skille d and experienced prese n ter. 6. ITV would pay Mr Chiles £1m in year one, which included coverage of World Cup 2010, £900,000 in year 2 and £1m in year 3, which included coverage of Euro 2012. In relation to highlights programmes he would be paid £7,500 per programme. The fees were payable in 10 instalments. 7. The fees would be paid irrespective of whether ITV required Mr Chiles to present the programmes. ITV would have noob li g ation to provide work or call on Mr Chiles to p ro v ide his services but if it did not it would still be required to pay the fees. 8. Mr Chiles could extend the term of the contract by an additional year if ITV obtained rights to broadcast Champions League matches for any part of the year after 31 May 2013. 9. ITV would arrange and pay for all expenses reasonably incurred by Mr Chiles in providing the services. He would be provided with the services of a stylist with on-screen clothing being provided by ITV which could be retained by Mr Chiles for his personal use. 10. Each party could terminate the agreement in the event of a material or persistent breach by the other party. Further: (1) ITV could terminate in the event of Mr Chiles committing any serious act of misconduct likely to bring himself or ITV into disrepute. (2) Mr Chiles could terminate if his services were not required by ITV for 12 consecutive weeks. If this occurred after 31 August 2011, Mr Chiles would be entitled to the balance of fees payable under the contract. (3) Mr. Chiles could terminate if ITV failed to acquire the rights to broadcast Champions League matches in contract year 3 witho u t any excl u si v ity pro v isions bi n din g him, allo w i ng him to follow the Ch ampio ns Lea g ue rig h ts. 11. ITV had the right to choose on which matches Mr Chiles should provide his services, the l o catio n from w hich the pro g ramme was broadcast and the time of the programme . 12. In relation to programme content, Mr C h iles wo u ld b e required t o take accou n t o f any reasonable comments presented t o him b y or on b ehalf o f ITV in the perf o rmance of the services. 13. ITV would have final editorial control over the programmes. 14. Save as expressly provided, ITV would have no contractual rig h t to require Mr Chiles t o perf o rm the services in any particular manner. 15. Mr. C hiles woul d have no contract u al ri g ht t o be paid for abse n ce cause d by sickness, h o liday or paternity. In the event he was unable to present a particular programme for such reasons he would be in breach of contract which may, depending on whether it was considered to be a material or persistent breach, give rise to a right for ITV to terminate the contract. 16. Mr Chiles had no right to provide a substitute presenter. If a substitute was required then ITV would engage and be responsible for paying the substitute. 17. Mr C h iles wo u ld be pro hib ited from perf o rming similar ser v ices for third parties in relation to any form of programming. For this purpose, the similar services would be p resenti n g live or highlights coverage o f fo o tball matches and associated ser v ices on television or radio broadcast in the UK. He would not be prevented from p resenting television or radio programmes generally, whether or not they included disc u ssions about foot b all. 18. Mr C h iles w o ul d be entitled t o undertake commercial acti v ities involving his name, image or on-screen services such as advertising, endorsement or sponsorship arrangements with the prior approval of ITV. He would not require ITV’s approval for the following activities provided that they were not reasonably likely to interfere with his provision of the services to ITV: (1) Personal and live (non-televised) appearances and public speaking engagements; (2) One-off guest appearances on chat shows and other television programmes; (3) Writing newspaper articles and columns; (4) Contributions to audio-visual products such as books and DVDs whether or not relating to football. Annex 2 Hypothetical Second ITV Contract (Material Differences) 1. The contract would be for a term of 2 years from 1 June 2013 to 31 May 2015. 2. Mr Chiles would personally provide services of significa n t creative and distincti v e in p ut and appearin g as lea d p resenter on such fo o tball pr o grammes as ITV might reasonably require. T he foot b all pr o grammes wo u ld be the li v e coverage and highlights on ITV 1 or ITV 4 of matches in various competitions including World Cup 2014. 3. ITV would pay Mr Chiles £900,000 in year one and £1m in year 2 which included World Cup 2014. The fees were payable in 10 instalments. 4. Mr Chiles would be fully involved in the editorial and creative aspects of the programmes including being invited to and attending such production meetings as may be reasonably required by ITV, save where he was presenting the 5 Live Show for BBC 5 Live on Fridays. 5. The restriction clauses were amended so that Mr C h iles would be p ro h ibited fr o m performi n g services in the UK in relation to any sports related audio or audio-visual pro g rammin g available via any television channel or online. 6. Mr Chiles could undertake commercial activities such as advertising, endorsement and sponsorship activities with the prior approval of ITV, not to be unreasonably withheld. He was not required to obtain ITV’s appr o val for hosting or appearing in any sports related radio programme subject to advance notice of any regular or long-term commitment. For the avoidance of doubt, ITV gave its approval to Mr Chiles hosting the 5 Live Show on Fridays. 7. Mr Chiles would give priority to providing the services over any other activity and would not enter into any commitment which was reasonably likely to interfere with his ability to provide the services. 8. The termination clauses were in similar form, save that: (1) ITV could terminate the agreement on notice with immediate effect in which case it would pay the balance of fees due under the agreement. (2) Mr Chiles could terminate if his services were not required by ITV for 5 consecutive matches or in the case of the quarter final, semi-final or final rounds of the Champions League for 3 consecutive matches. In that event, Mr Chiles would be entitled to the balance of fees payable under the contract. Annex 3 Hypothetical First BBC Contract 1. Mr Chiles would provide his services to the BBC. 2. The contract would be for a term of 1 year from 8 November 2013 to 7 November 2014. 3. Mr Chiles would provide his services as a presenter of Friday Drive on BBC Radio 5 Live for a minimum of 42 programmes together with reasonable ancillar y ser v ices, includi n g preparation, creative inp u t and travel. Friday Drive would be aired on late Friday afternoon and early Friday evening. Subject to that, the BBC could require Mr Chiles to attend at such times and places as they deemed reasonably necessary. 4. BBC would have noob li g ation to call on Mr Chiles to p ro v ide his services, but the expectati on and understanding w as that they wo u ld d o so. In the event that his services were not required the BBC would still be required to pay the fees. 5. The fee was £50,400 which was equivalent to £1,200 per programme and was payable monthly in arrears. The fee for each additional programme would be £1,200. 6. If Mr Chiles was not available to present a programme then the BBC could reduce the fee proportionately. 7. Mr. Chiles wo u ld be required to be up to date with news and current affairs and would carry out the necessar y research and any ot h er non-studi o preparator y wor k at the times and location of his choice. Mr Chiles would bear the costs of doing so and any other expenses of providing the services unless exceptionally agreed by the BBC in advance. 8. In pro v idi n g h is services Mr. C h iles wo u ld do so with all necessary skill , ability, k no wledge and experience , use all pr o per care and d iligence, read legally appr o ved scri p ts as written and otherwise comply with all objectively reasonable requests as may be made by the BBC in connection with the services. He would not include any remarks or interjections the BBC had asked him to avoid. 9. Mr. C hiles woul d have no contract u al ri g ht t o be paid for abse n ce cause d by sickness, h o liday or paternity or enjoy any of the other benefits pro vid ed ro u tinely by the BBC t o its staff. In the event he was unable to present a particular programme for such reasons his fees would be reduced proportionately. 10. Abse n ce for any reason would amount to a breach of contract and could, depending on whether it was considered to be a material breach, give rise to a right for the BBC to terminate the contract. 11. Mr. C h iles wo u ld not be subject to any exclusivity pro visions, or other restrictions on providing his services to third parties. However, the BBC would have first call on his services for the Friday Drive programme, save that any commitments in respect of ITV football were treated as having been cleared and agreed in advance. 12. Mr . Chiles would b e required to compl y with U K law s, radi o industr y rules and regulatio n s and BBC Sta n dar d s and Editorial Guidelines. He would be required to complete such editorial training as the BBC may require. 13. Mr Chiles would not allow any form of publication of written material for a party other than the BBC that was intended to include content about the BBC, or which could reasonably be considered to compromise BBC Standards. 14. Mr Chiles would not behave in a manner which could bring himself or the BBC into disrepute. 15. Mr Chiles would not engage in any conduct or interests which could compromise or call into question the impartiality or integrity of the BBC. 16. BBC would have final editorial control over the programmes. 17. The BBC would be entitled to terminate the contract if Mr Chiles committed a material or irremediable breach of the contract, including if Chiles was unable personally to provide the services for any reason. 18. It was not intended that the contract would constitute Mr Chiles an employee of the BBC. Annex 4 Hypothetical Second BBC Contract (Material Differences) 1. The co n tract w o uld be for a term of 1 8 mont h s from 6 April 2014 to 5 April 2016. 2. Mr Chiles would provide his services as a presenter of a mid-morning programme on Radio 5 Live (5Live Daily) on Mondays and Tuesdays for a minimum of 135 programmes and undertake all promotional activity in connection with the programmes as reasonably requested by the BBC together with reasonable ancillar y ser v ices, includi n g preparation, creative inp u t and travel. 3. The fee was £168,750 which was equivalent to £1,250 per programme and was payable monthly in arrears. The fee for each additional programme would be £1,250. Annex 5 Hypothetical Third BBC Contract (Material Differences) 1. The co n tract w o uld be for a term of 3 years from 6 April 2016 to 5 April 2019. 2. Mr Chiles would provide his services as a presenter of 5Live Daily, mid-morning on Mondays and Tuesdays for a minimum of 86 programmes per year from Salford, 15 programmes from London to include 8 Wednesday programmes featuring PMQs, a programme on the day after the European Referendum and Question Time Extra, 3 days deputising for other presenters and 4 preparation days for outside broadcasts. He would also undertake all promotional activity in connection with the programmes as reasonably requested by the BBC together with reasonable ancillar y ser v ices, includi n g preparation, creative inp u t and travel. 3. The fee was £405,000 which was equivalent to £1,250 per programme and was payable monthly in arrears. The fee for each additional programme would be £1,250. 4. There was no reference to any ITV football commitment because by this stage Mr Chiles was not appearing on ITV.

BASIC BROADCASTING LIMITED v Revenue & Customs (INCOME TAX AND NATIONAL INSURANCE - intermediaries legislation) [2022] UKFTT 48 (TC)

Cited in 4 later judgments