The 2024 employment status case between HMRC and the Professional Game Match Officials Limited (PGMOL) has sent shockwaves through the compliance world [Commissioners for His Majesty’s Revenue and Customs (Respondent) v Professional Game Match Officials Ltd (Appellant) – UK Supreme Court]. Whilst on the surface it’s about football referees, the underlying principles touch every business managing self-employed subcontractors.
So this leaves everyone asking the same question now: what does this mean for anyone managing self-employed subcontractors in their business?
The Case in Plain English
The HMRC vs PGMOL case revolves around one fundamental question: are football referees employees or self-employed contractors? Basically, HMRC argued that match officials should be classified as employees. This would result in significant tax and National Insurance obligations for PGMOL. The organisation argued the opposite: that referees operate as self-employed individuals with genuine autonomy.
At the heart of this dispute lie three critical tests for employment status: Firstly, mutuality of obligation which is when there’s an ongoing obligation for the organisation to offer work and for the individual to accept it. Secondly, the question of control which examines who dictates how, when and where the work is performed. Thirdly, there is the test of whether the overall terms and conditions of the contract are consistent with a contract of employment. It’s important to note that these aren’t just academic concepts: they’re the criteria HMRC uses to determine whether someone is genuinely self-employed or is just an employee wearing their own kit.
The Real Problem: Internal Docs Didn’t Match Reality
Here’s where PGMOL’s defence crumbled. They had contracts saying one thing, but internal policies and procedures saying something completely different. So when HMRC looked at how referees actually worked day-to-day, the reality matched the internal policies. And these pointed towards employment, not self-employment. The contracts claimed referees were independent, but the scheduling systems, performance monitoring, training requirements, and disciplinary procedures all showed HMRC a workforce being managed like employees. It was this disconnect that proved fatal. Lessons for Construction & Compliance
The construction sector needs to be paying close attention to all this. The parallels with IR35 cases are impossible to ignore. Just as PGMOL believed their contractual arrangements protected them, many construction firms operate under similar false assumptions about their subcontractor relationships.
So what specific lessons can be drawn?
First lesson: documentation is evidence, not protection. Your contracts, site policies, timesheets and communications can all be used to demonstrate the true nature of working relationships. HMRC increasingly uses documentation as evidence in tribunals, and poorly aligned paperwork becomes ammunition against you rather than defence.
Second lesson: operational reality trumps contractual clauses. If your contracts state that subcontractors have complete autonomy over how work is performed, but you’re actually directing their every move on site, assigning specific tasks and deciding their working hours, you’ve created a disconnect that HMRC will exploit.
Third lesson: long-term working patterns can override contractual terms. If you work with the same subbies month after month, year after year, giving them consistent work that they always accept, HMRC may argue you’ve created an ongoing obligation regardless of what your contract says. Document genuine reasons for repeat engagement and ensure breaks in service where appropriate.
Practical Steps:
Review your agreements annually to ensure they reflect actual working practices. Don’t just assume a contract drafted three years ago remains fit for purpose if working arrangements have changed [https://hardhats.co.uk/do-subcontractors-need-a-contract].
Make sure site policies, induction procedures and daily management practices match the self-employed status you’re claiming. If subcontractors go through substantially the same onboarding as employees and are managed identically, you’re setting up HMRC’s case for them.
And be cautious about assuming that using agencies or payroll providers automatically solves employment status risks. HMRC can look through these arrangements to examine the underlying working relationship. Make sure the actual day-to-day arrangement supports self-employment, not just the payment structure. .
Protect Your Business Before HMRC Comes Knocking
The HMRC vs PGMOL case is a wake-up call for any organisation managing contractors or self-employed workers. The message is clear: your documentation must reflect reality, and that reality must genuinely support self-employed status under HMRC’s tests.
Don’t wait for an investigation to discover your contracts don’t stand up to scrutiny. Book a compliance review with us to assess your specific working arrangements, documentation and operational practices.
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