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Implications of a no-deal Brexit

David Miller looks at the practical implications of Brexit on international trade for small businesses.

The government’s recent release detailing its plans for businesses trading with the European Union in the “unlikely” event of a no-deal Brexit brings with it further uncertainty for those small businesses that are part of an international supply chain. Despite the fact that the report attempts to provide assurances that negotiations are progressing well, businesses of all sizes continue to question what the future holds for their trading operations once Brexit is finalised on 29 March 2019.

While the government report certainly makes for interesting reading, the real takeaway is that any business involved in international trade — and particularly with EU countries — should consider the impact that Brexit is set to have on their operations, and start to make plans accordingly.
Detailed guidance

The government’s guidance papers say that in the event of a no-deal Brexit, businesses will have to lodge customs declarations and potentially pay customs duty on goods imported from EU countries. The guidance also says that companies “may wish to consider taking professional advice”, but there are a number of key omissions from the guidance that allow small businesses to carry out some risk mitigation.
Missing AEO

One factor the government has failed to mention is that the concept of Authorised Economic Operator (AEO) status is a way that importers and exporters can ensure they are in the best position ahead of Brexit. AEO status can help speed up customs processes, standing firms in good stead, whatever the outcome of the Brexit negotiations. Even if the UK does negotiate a deal, AEO accreditation may be advantageous in addressing existing Brexit concerns.

Why the government failed to mention AEO in the guidance papers remains a mystery. One can only imagine that it comes down to a lack of resources to process a huge number of applications that could follow such widespread advice. Businesses should seriously consider this option in order to be in the best possible position next year.
AEO explained

AEO is an integral part of the Union Customs Code legislation, which will be replicated in UK law as a result of Brexit. It is an internationally recognised quality kite mark indicating that a business’s role in the international supply chain is secure, and that customs controls and procedures are efficient and compliant.

In simple terms, AEO status means that items can pass through customs as quickly as possible, avoiding delays in the supply chain being a key risk mitigation factor for companies.

AEO status also means:

● It is quicker and easier to obtain customs simplifications

● The business is subjected to fewer physical and document checks at borders

● If the truck is selected at controls, it will be given priority as an AEO consignment

● The business can request that a control is held at a different place

Some key benefits of AEO status include:

● More efficient transferring through borders

● Less risk and more effective checks on the reliability of third parties

● Potentially lower insurance premiums in the future

● More efficient import/export systems

If a Brexit conclusion is not reached, businesses importing goods from the EU will be required to follow customs procedures in the same way that they currently do when importing or exporting from and to countries outside the EU. This means that for goods entering the UK from the EU, an import declaration will be required, customs checks might be carried out and any customs duties must be paid.

The government release states that before importing goods from the EU, a business will need to:

● Register for a UK Economic Operator Registration and Identification Number

● Ensure their contracts, and international terms and conditions of service reflect that they are now an importer

● Consider how they will support declarations, including whether to engage a customs broker, freight forwarder or logistics provider. Engaging a customs broker or acquiring the appropriate software and authorisations from HMRC will come at a cost

● Decide the correct classification and value of their goods and enter this on the customs declaration
Limited warehousing capacity

Customs warehousing has been presented as a means of safeguarding operations in the event of a no-deal Brexit. However, if everyone rushes to carry out this approach, demand will likely skyrocket and could lead to delays.

At present, I understand that there are more than 800 customs warehouses authorised within the UK, and even before considering Brexit, 750 of these will need to be re-authorised by the end of April 2019. This means that there could easily be a huge rush on the authorities to action these requests in time, particularly if demand for such warehouses rises at the time of Brexit.


All things considered, it is essential for businesses working across all industries to consider the impact of their imports and exports in the event of a no-deal Brexit. Also, with suggestions from some cabinet ministers, including Liam Fox, that a no deal was the “most likely outcome” for Britain, it is highly likely that firms will need some safeguards in place, whatever the eventuality


This artcile was written by David Miller of The Customs People for for the original of this article please follow this link : Implications of a no-deal Brexit

Entrepreneurs Relief – Not so simple

There have been some changes released to entreprenuers releif with the 2018 budget. Here a few of the important points to look out for.

Meeting Conditions

To qualify you must now meet the 5 following conditions, whereas before it was only 3. They must all also be met within a 12-month period ending with the date of disposal, or the date the company ceased trading or ceased being a member of a trading group, where the shares are sold within three years of that cessation. The conditions are:

– Be an employee or officer of the company.

– Hold at least 5% of the “ordinary share capital”.

– Hold at least 5% of the voting rights associated with that ordinary share capital.

– Be entitled to at least 5% of the company’s distributable profits.

– Have a right to at least 5% of the net assets of the company available to equity holders on a winding up.

The two former conditions listed were added to ensure that induviduals who are benefitting from this relief, do in fact have a material stake in the company.

For more information about entrepeneur’s relief follow this link: Entrepreneur’ Relief.

Xerocon 2018’s biggest Announcement

Xero have announced their move into income tax, corporation tax and accounts production at their convention this year. This news came straight from Xero’s UK MD Gary Turner as he revealed in his presentation this expansion of their services.

Also demonstrated at Xerocon, instafiles automated tax filing and financial reporting for small UK entities by connecting directly to HMRC and Companies House. They also revealed that work has already been done to integrate the products allowing the accountant partners use of these products. To top it all of they also revealed that this would be available free to Xero’s accounting partners as part of the existing HQ package.

Chief product officer Anna Curzon as part of this announcement, said: “We will solve compliance in the UK,” and “We’re going to give you powerful tools that allow you to do your compliance work from right within Xero.”

As users of Xero’s systems here at Cloud Bookkeeper, we are excited on the upcoming features and how we can best use them for the benefit of us and our clients.

For more information on the features and tools available by Xero follow this link: Features and Tools.

MTD for small VAT clients: Get on track and get ready for April

Neil Warren attended the MTD for VAT AccountingWEB conference on 1 November, and shares some important practical tips he picked-up there.

So far with MTD, we have largely focused on the general principles that will apply from 1 April 2019 – the who, what, how, and when. This event gave accountants a chance to look at some of the practical issues that will apply, with specific solutions highlighted by the speakers.

Key messages

Tax titan Rebecca Benneyworth emphasised that we should never forget the key difference between VAT and income tax, namely that VAT is a transactional tax. We need to be aware of the VAT issues of every transaction we process and this issue will be even more important with the introduction of MTD.

Benneyworth highlighted that there are many quirks within VAT that HMRC didn’t recognise as a potential challenge with MTD at first: capital goods scheme, partial exemption, margin schemes and TOMS. VAT is not the easy tax for MTD that HMRC might have anticipated.

Matt Flanagan, a cloud business systems specialist and managing director of Bluehub, surprised me with the revelation that the average age of UK business owners is currently 51 but this would fall to mid-30s in eight years’ time. This is an important statistic for the future development of accountancy practices, knowing that most new clients will have been fully brought up in the digital age of modern technology.

Four stage process

Flanagan’s session highlighted a four-stage process for dealing with MTD:

  1. Identify clients who are within the scope of MTD – ie businesses trading over the VAT registration threshold.
  2. Review the current accounting systems of each client – are they MTD compliant?
  3. Define client requirements after April 2019 – this might involve the adoption of new accounting packages.
  4. Offer an MTD solution to each client – acknowledging the skills and mindset of each client.

Points based system

Flanagan suggested we give each client two marks out of five – one for the quality of the client (1 being low and 5 being high), recognising the client’s mindset and therefore likely reaction to the challenges of MTD. The second mark recognises the quality of the client’s accounting system. For example, is he relying on an old system from the 1990s that could collapse at any moment?

If all of your clients score 25 (5 x 5), then MTD should be a piece of cake. But a mark of 1 to 5 indicates more challenging times.

View image on Twitter

Dealing with clients

The client liaison theme was extended by Phil Sayers, founder of Proten Sales Development, who considers that “clients need to work with processes adopted by practices”, which would often need some time spent with the client ie an MTD conversion effort. He considers that a standard letter notifying clients about the introduction of MTD might not be effective, so a simple note in red along the lines of: “I need to speak to you in the next two weeks about something urgent – will you please call me” might generate better results. I like that idea.

Digital links

Benneyworth gave an example of a farmer using Farmplan software to raise its sales invoices. A journal might be raised to enter the monthly or quarterly totals from Farmplan into Sage. This would be fine for the first year of MTD during the soft-landing period. But from 1 April 2020, this software link from Farmplan to Sage would need to be done digitally using import tools, so there must be no re-keying of data, cut and pasting, or manual journals.

Software presentations

There were presentations from Receipt Bank, FreeAgent and BTCSoftware, all of which made me realise how far we have come in the last 10 years. An example was quoted of a sole trader bookkeeper who had the capacity to act for 120 clients rather than 30 after he adopted Receipt Bank.

Final tips

Benneyworth gave three final tips in her session:

  • Encourage clients to join the HMRC pilot scheme, assuming they are one of the 500,000 businesses now eligible to do so.
  • Suppress VAT codes in accounting software that are not needed eg a business would not need a reverse charge VAT code if it does not buy services from abroad.
  • Examples of letters that can be sent to clients can be found on the ICAEW MTD hub, along with other useful information.


With the introduction of MTD less than five months away, we now need to be interested in some of the finer details. As the conference chairman John Stokdyk rightly commented: “It is time to get on track and get ready for April.”

This article was taken from, For the original article follow this link: Accountingweb

Summary of the 2018 Budget

Personal Tax & Wages

– The personal allowance threshold, the rate at which people start paying income tax at 20%, to rise from £11,850 to £12,500 in April – a year earlier than planned

– The higher rate income tax threshold, the point at which people start paying tax at 40%, to rise from £46,350 to £50,000 in April
After that, the two rates will rise in line with inflation

– National Living Wage increasing by 4.9%, from £7.83 to £8.21 an hour, from April 2019.

– Tax rates and thresholds are different in Scotland. The Scottish government’s Finance Secretary Derek Mackay will set out his plan for Scottish tax payers on 12 December.

Alcohol, tobacco and fuel

– Beer, cider and spirits duties to be frozen

– Cost of a bottle of wine duty to rise by 8p, in line with inflation, in February

– Tobacco duty will continue to rise by inflation plus 2%

– A packet of 20 cigarettes will go up by 33p at 18.00 GMT

– A ten gram pack of cigars goes up by 17p.

– Fuel duty to be frozen for ninth year in a row

– Remote Gaming Duty to increase to 21% for online gambling on “games of chance” from 2019

Stamp duty and housing

– All first-time buyers purchasing shared equity homes of up to £500,000 will be eligible for first-time buyers’ relief

– £500m for the Housing Infrastructure Fund, designed to enable a further 650,000 homes to be built

– Lettings relief limited to properties where the owner is in shared occupancy with the tenant

– New partnerships with housing associations in England to deliver 13,000 homes

– Guarantees of up to £1bn for smaller house-builders

Welfare and pensions

– Work allowances for universal credit to be increased by £1.7bn

– 2.4 million working families with children to benefit by £630 a year

– An extra £1bn to help welfare claimants transfer to the new consolidated benefit

– Chancellor insists controversial system is “here to stay”

The state of the economy

– Era of austerity is “finally coming to an end”, the chancellor says

– 2018 growth forecast downgraded to 1.3% from 1.5% in March, due to impact of bad Spring weather

– But forecast for 2019 raised from 1.3% to 1.6% and annual forecasts raised to 1.4%, 1.4%, 1.5% and 1.6% in 2020, 2021, 2022 and 2023 respectively.

– 3.3 million more people in work since 2010 and 800,000 more jobs forecast by 2022.

– Wages growth at its highest in nearly a decade

The state of the public finances

– Public borrowing in 2018 to be £11.6bn lower than forecast in March, representing 1.2% of gross domestic product, (GDP) the total value of goods produced and services provided

– Borrowing as a share of GDP to rise to 1.4% next year

– Borrowing to total £31.8bn, £26.7bn. £23.8bn, £20.8bn and £19.8bn in next five years

– Debt as share of GDP peaked at 85.2% in 2016-17, falling to 83.7% this year and to 74.1% by 2023-24

– 1.2% annual average growth in departmental spending promised


– Extra £500m for preparations for leaving the EU

– Spring Statement next March could be upgraded to full Budget if needed

– A commemorative 50p coin to mark the UK’s departure from the EU

Defence and security

– An extra £160m for counter-terrorism police

– An extra £1bn for armed forces, for cyber-capabilities and the UK’s new nuclear submarine programme

– £10m for mental health care for veterans, to mark the centenary of the Armistice which brought World War One to an end

– £1m to fund school trips to World War One battlefields

– £1.7m in Holocaust education programmes to mark the 75th anniversary of the liberation of Bergen-Belsen concentration camp, in northern Germany

Business and digital

– New 2% digital services tax on UK revenues of big technology companies, from April 2020

– Profitable companies with global sales of more than £500m will be liable

– Private finance initiative (PFI) contracts to be abolished in future

– New centre of excellence to manage existing deals “in the taxpayer’s interest”

– Annual investment allowance to be increased from £200,000 to £1m for two years

– Contribution of small companies to apprenticeship levy to be reduced from 10% to 5%

– Business rates bill for firms with a rateable value of £51,000 or less to be cut by third over two years

– Measure to benefit 90% of independent shops, pubs and restaurants, cutting bills by £8,000

– £900m in business rates relief for small businesses and £650m to rejuvenate High Streets

-New 100% mandatory business rates relief for all lavatories made available for public use

– Extending changes to the way self-employment status is taxed, from the public sector to medium and large private companies, from 2020

Education and health (England only)

– Confirmation of an extra £20.5bn for the NHS over the next five years

– A minimum extra £2bn a year for mental health services
New mental health crisis centres, providing support in every accident and emergency unit in the country

– More mental health ambulances and a 24-hour mental health crisis hotline.

– An extra £700m for councils, for care for the elderly and those with disabilities

– £10m for air ambulances

– A one-off £400m “bonus” to help schools buy “the little extras they need” this year

– Funding for 10 University Enterprise Zones

Transport, infrastructure and culture

– A £30bn package for England’s roads, including repairs to motorways and potholes

– A 30% growth in infrastructure spending

– Opening the use of e-passport gates at airports – currently available to people from Europe – to those from the USA, Canada, New Zealand, Australia and Japan

– Air Passenger Duty to be indexed in line with inflation

Environment and energy

– A new tax on plastic packaging which does not contain 30% recyclable material

– No tax on takeaway coffee cups but to be reconsidered if the industry doesn’t make enough progress

– £60m for planting trees in England

– £10m to deal with abandoned waste sites

Nations and regions

– An additional £950m for the Scottish government, £550m for the Welsh government and £320m for a Northern Ireland Executive in the period to 2020-21

– New City and Growth deals for Belfast, north Wales and the Tay Cities area, which includes the cities of Dundee and Perth as well as Angus and the north part of Fife,

– £2m for Belfast to help recover from August’s Primark fire

– £70m to develop the Defence and National Rehabilitation Centre near Loughborough



Main Points taken from the BBC News website.

Phillip Hammonds under pressure to raise money for the NHS

The Treasury is finalising plans to overhaul tax rules which allow self-employed people to avoid paying national insurance contributions.

The move will be targeted at people who set themselves up as private companies to take on work.

announcements that may be in this month’s Budget.

The Treasury believes a third of people claiming self-employed status as a “personal service company” are actually full employees and should pay more tax.

It says without reform, high levels of non-compliance with tax rules could cost HM Revenue and Customs, which collects taxes, £1.2bn a year by 2023.

It is now looking at demanding that firms which use personal service company contractors take legal responsibility for ensuring “off-payroll” contractors stick to the tax rules known as IR35.

A similar move in the public sector on “synthetic” self-employed has raised £410m extra in taxes since 2016, HMRC estimates suggest.

Full employees pay higher levels of national insurance compared with the self-employed.

Philip Hammond is under pressure to raise taxes at the Budget following the Prime Minister’s pledge of £20bn worth of extra spending on the NHS by 2023.

Personal income tax allowances could be frozen, despite a Tory pledge at the 2017 election that they would rise to £12,500 for lower rate taxpayers and £50,000 for higher rate taxpayers by 2020.

Freezing them could raise up to £2bn a year.

Reform of the IR35 rules would not raise as much, but might be less politically controversial.


Digital Tax? could this be the future ?

Britain’s high streets will be dominated by charity shops and betting shops unless business rates are overhauled, a senior Tory councillor has warned.

With just under two weeks to go until the Budget, Philip Hammond was urged to create a ‘level playing field’ for regular shops as they face an onslaught from online giants.

The leader of Westminster City Council called for a 1 per cent turnover tax on tech giants such as Amazon to alleviate the pain.

Hammond told the Tory party conference last month he might introduce a digital services tax on web giants such as Amazon, Facebook and Google.

The Mail has called for a reform of business rates as part of our Save Our High Streets campaign amid a crisis gripping the sector.

Around 50,000 retail jobs have already been lost this year, and about 61,000 stores have shut in the past five years.

Major retailers such as Poundworld, Toys R Us and Maplin have gone bust while House of Fraser was saved from collapse by Sports Direct.

Councillor Nickie Aiken, leader of Westminster City Council, said: ‘I absolutely support the Mail’s campaign. Westminster City Council has already called for a 1 per cent turnover tax on tech titans.

‘I would ask the Treasury: do we want to continue the decline so that the only things left on the High Street are charity shops and betting shops?’

Business rates are based on the estimated rental value of a retailer’s property. Andrew Goodacre, chief executive of the British Independent Retailers Association, said: ‘It becomes a real challenge to afford, because it doesn’t matter how well or how badly you’re doing, the cost is not going down.’

Edward Woodall, head of policy at the Association of Convenience Stores, said the tax discourages investment.

If a shopkeeper refurbishes their store, or installs new equipment, it makes the property more valuable, so rates go up. He said: ‘The system doesn’t really incentivise investment.’

Self Employed Tax Cut Scrapped by Hammond

Plans for a tax cut for millions of self-employed workers have been scrapped by chancellor Phillip Hammond. This will cost those affected £130 a year, and those affected number around three million.

They have denied plans to abolish class 2 National Insurance Contributions for the self-employed, and in the words of John O’Connell is ‘letting down’ all those affected. Also saying that ‘High taxes on the self-employed discourages entrepreneurship and risk-taking.’ O’Connell has been making it clear that he opposes the scrapping of the plans, which were planned to have taken place in April. But obviously were delayed for a year, and was recently fully overturned with no sign or repeal in sight.

HMRC caught offside over referees

By Contractor Weekly


Tribunal rules football refs were self-employed

HMRC has lost another employment status case at the First-tier Tax Tribunal, this time involving football officials.

The Revenue had raised tax and NIC assessments on the Professional Game Match Officials Ltd (PGMOL) totalling nearly £584K for the two years ended 5th April 2016, on the basis that they considered football referees to be employed.


The PGMOL oversees the management and administration of refereeing in professional football and provides referees and match officials for games in the most significant football competitions such as the Premier League, FA Cup and the English Football League (Championship and Leagues 1 and 2). It has three members who fund the company; the Football Association (FA), the FA Premier League (Premier League) and the Football League, now referred to as the English Football League (EFL).

The FA is the governing body for English football, including all refs in England, and classifies them by reference to a number of different levels, ranging from International, and Level 1 (National List) to Level 9 (trainee referees). The PGMOL’s role relates primarily to referees at Level 1 and their appointments to matches.

A number of refs are employed under full-time contracts by the PGMOL and are referred to as ‘Select Group’ referees. These officials will primarily take charge of Premier League matches. Select Group refs are expected to do everything the PGMOL asks, including following training programmes, attending all meetings, ensuring that pre-match preparation is suitable, being available for appointments and even cancelling holidays.

This appeal concerned refs who refereed in their spare time alongside other full-time employments and who primarily officiated matches in the EFL and FA Cup. Their role was described as a hobby, albeit a very serious one. Refereeing is fitted in around other paid work, and it does not pay the bills. These refs are paid modest match fees and expenses by the home club, and not via the FA. In contrast to Select Group referees, National Group referees are, for example, not obliged to follow a particular training programme or attend training meetings and they have no obligation to accept match appointments.

Code of Practice 

Upon invitation to join the referees list, a ref is issued with a Code of Practice that states:

“you are not an employee of PGMOL and will be treated as being self-employed.”

Under ‘Appointments’ it is stated that these will be made by PGMOL, and that there is:

“no guarantee that Match Officials on the List will be offered any appointments to matches and Match Officials are not obliged to accept any appointments to matches offered to them.”

A number of points are listed under ‘Expectations’, all introduced by the words “Match Officials shall be expected to….”:

  • be readily and regularly available for appointment to matches;
  • reaching and maintaining a satisfactory level of fitness as determined by PGMOL;
  • undergo fitness testing and any other assessments in accordance with the Fitness Protocol;
  • observing and obeying the FA and competition rules and regulations; and
  • carrying out all instructions, procedures and directives relating to Match Officials issued by PGMOL.

The document also refers to “continuous monitoring” of performance with “individual appraisals being made when appropriate”.

Also mentioned is the training programme and coaching system stating that referees:

“will be required to attend meetings arranged by coaches at specific times throughout the season.”

PGMOL Code of Conduct

Compliance with this Code is a condition of being either an employee or a “self-employed contractor” and that bribery or corruption could result in dismissal of employees for gross misconduct or, for self-employed match participants, removal from the list.

Hospitality or gifts in excess of £50 in value must be recorded on the gift register without delay, and anything in excess of £100 requires prior approval by the General Manager.

Whole kit and caboodle

Match and training kit for National Group refs is provided by PGMOL, together with suits (to be worn to and from matches), ties with the PGMOL logo and overcoats. Assistant referees and Fourth Officials receive similar kit, so as to create the appearance of a professional team. Match kit is provided in four different colours with the ref choosing which set to wear on the day. However, National Group refs must supply their own boots and trainers, watches, cards and whistles. In practice, they also require their own computer, and many pay for gym subscriptions and heart monitors that are used to provide data to PGMOL’s sports scientists, as well as for other items such as Sky TV subscriptions, nutritional supplements and sports massages.

PGMOL loans the use of communication equipment to allow match officials to communicate.

Private medical insurance is offered to National Group refs by PGMOL, and in practice generally reimbursed the excess on claims. Additionally, PGMOL offers a heart screening programme and psychological support.

Match fees

Match fees and allowances are set by PGMOL. Payment of fees and expenses is not dependent on the production of an invoice by the ref. From 2015/16 onwards, it has been an automated process that follows from the submission of a post-match report by the ref and the entry of details of expenses via software called the Match Official Administration System (MOAS). Training attendance fees and expenses are paid in the same way. Prior to this, match expense claims for EFL matches were submitted directly to the home club using an ‘expenses claim’ form.

No substitutes

Referees who do not attend games for whatever reason do not get paid their match fee. Furthermore, the PGMOL may also cancel an appointment of one ref and replace him with another. In both these instances though, the substitution of an alternative ref would be a matter for PGMOL, not the referee.

Mutuality of obligation (MOO)

HMRC argued that the expectation of being offered work, resulting from the practice over a period of time, can constitute a legal obligation to provide some work or perform work provided. In this case, there was sufficient MOO between matches, but in any event the refs were in practice regularly offered, and regularly accepted, work throughout the season. The requirement in the Code of Practice to be readily and regularly available for appointment to matches was in practice more than an expectation.

The Tribunal did not agree. During the actual engagement, there would be some level of mutuality, namely for the ref to officiate as contemplated (unless he informed PGMOL that he could not) and for PGMOL to make payment for the work actually done. However, the Tribunal’s view was the discrete contract started when an individual match appointment was offered and accepted, and that even after acceptance the ref had the ability to withdraw from the engagement before he arrived at the ground, and that PGMOL was also able to cancel the appointments.


According to HMRC, there was a sufficient degree of control exercised over referees. The practical realities of the relevant industry had to be taken into account, and all that was needed was a sufficient framework of control. The level of control exercised during matches was the same as for the Select Group, who were accepted as being employed. There was continual monitoring and assessment via the assessor and coaching system, and assessments fed into remuneration. The assessment system was no different to regular employee appraisals. Once a referee had indicated his availability on a particular date he had no ability to choose which match to officiate in. That was entirely at the discretion of PGMOL. PGMOL also had the ultimate right to sanction referees by suspending them from officiating, and imposed controls on off-pitch activity via the Code of Practice and Protocols.

Counsel for PGMOL however, argued that the control that existed was regulatory control rather than control resting with PGMOL, and that during engagements referees, like clergy, were beyond control.

The Tribunal agreed that the pre-season documents, including the fitness protocol, the Match Day Procedures document, and the Code of Conduct, imposed some obligations on referees which gave PGMOL elements of control. However, they were not persuaded that the assessment and coaching systems themselves provided further elements of control in respect of individual match appointments. This is advisory rather than controlling in nature. Similarly, the coaching system is very much a personal, one-to-one arrangement designed to support referees and assist them to develop to the best of their ability. A coach present at a match might offer advice at half time as well as before or after, but that is simply advice and not an indicator of control.

Although some referees suggested in HMRC’s interviews that they had no control over where they were sent for matches, Tribunal did not think that that was correct in a legal sense. They had the right not only to express geographical preferences on MOAS but also to refuse any particular appointment once it was offered, or even to back out later. This was not the sort of arrangement under which PGMOL could direct the referees about where to go or when to go there, or indeed what task to perform when they got there. In each case, the refs needed to agree to take on a particular task at a specified location, date and time. Referees clearly had to travel to the location to carry out the appointment, but that was determined by the nature of the task they had agreed to take on rather than by any form of control in an employment sense.

Whilst the Tribunal would not go as far as comparing referees to clergy, it was relevant to consider the nature of the role.

The Laws of the Game make it clear that the referee’s decision is final, and there was no suggestion that PGMOL could, for example, remove the ref at half time and replace him with another, or do anything more than offer coaching advice.

Overall, the Tribunal were not persuaded that PGMOL had a sufficient degree of control during the individual engagements to satisfy the test of an employment relationship. It did have a level of control outside match appointments as a consequence of the overarching contract. Although some of the obligations imposed by that contract applied to matches, there was no mechanism enabling PGMOL to exercise the corresponding rights during an engagement. In reality, the only sanction PGMOL could impose for failure to adhere to these commitments was not to offer further match appointments, and to suspend or remove the referee from the National Group list. If an issue emerged between a match appointment being made and the date of the match, then the most PGMOL could do in respect of that appointment was to cancel it. That is not an exercise of control during an engagement, but rather it is a termination of that particular contract.

The fact that there was some element of control did not automatically mean there was a contract of service (employment), as HMRC are so keen to argue.


There were some pointers towards employment such as:

  • level of integration;
  • hours worked;
  • referees were not in business on their own account; and
  • PGMOL was the refs only or primary paymaster

These however, were vastly outweighed by the fact that there was insufficient MOO and control, and therefore it was ruled that the refs were self-employed.

Yet another lesson for HMRC in MOO and control but don’t expect them to be swayed by common sense and logical argument any time soon.

The full judgment can be found here: PGMOL v HMRC.


This Article was written by Contractor Weekly.

Annexe or Enlargement?

The case of Roman Catholic Diocese of Westminster v HMRC (TC06692) related to a new church hall built at St Joseph Church in Stevenage, linked to an existing church building. The issue in dispute was whether the new hall was:

a)an ‘annexe’, ie an independent building capable of functioning in its own right, separate to the existing church (VAT Notice 708, para 3.2.6);
b) or an enlargement or extension to the existing church.

The Diocese (a charity) had assumed that a) applied and it was correct to issue a VAT certificate to the builder to confirm that this was the case. HMRC believed that b) applied, in which case the builder’s services would be standard rated.

After much deliberation, the tribunal allowed the appeal and looked at the before and after of the building post completion of the works, and concluded that structures were different. Therefore qualifying as an annexe.

Tips for these kinds of disputes:

1. Always focus on the approach of the judge, who I felt really cut through the finer detail and looked at the bigger picture. He said he examined “the physical characters of the building as it was, and as it is after completion of the works.”

2. Ensure that the new building will function independently from existing buildings. The new church hall even had separate heating thermostats and boiler controls.

3. Don’t be afraid to ask for a ruling from HMRC – the charity unit is much more accommodating in giving written VAT rulings than for a commercial business. There is an online form headed: “Charities and VAT – Enquiry form for Charities” which can be completed and submitted and then you get an email reply with a decision.