Sky Sports employed Phil Thompson as a Soccer Saturday pundit for 22 years before ditching the former Liverpool captain as part of a shake-up in the summer of 2020
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Liverpool legend Phil Thompson
Liverpool legend Phil Thompson(Image: Colin Lane/Liverpool Echo)
Phil Thompson owes HMRC nearly £300,000 after an unsuccessful appeal relating to IR35 regulations. Thompson, 71, played almost 500 times for Liverpool during the 1970s and 1980s, captaining the club and winning seven league titles and three European Cups.
After retiring, he became a coach at the club under Kenny Dalglish and, briefly, Graeme Souness before returning as Gerard Houllier's assistant manager and taking caretaker charge of the club for several months after Houllier had emergency heart surgery.
Following those spells he worked as a Sky Sports pundit on Soccer Saturday, spending 22 years with the broadcaster before departing in August 2020.
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Thompson's television work went through his company, PD & MJ Ltd. HMRC assessed his work with Sky from 2013-14 to 2017-18 and determined that he fell within the scope of IR35 legislation. They claimed he owed £294,306 in tax for Pay As You Earn (PAYE) and National Insurance contributions (NIC).
Initially, Thompson challenged this decision to the First-tier Tribunal, but they rejected that appeal on December 11, 2023. He escalated the matter to the Upper Tribunal in January, yet on Monday, two judges upheld the previous ruling, finding the original decision did not disclose a material error of law.
Seb Maley, CEO of Qdos, commented on the case: "HMRC pursues a high-profile freelance presenter who has fallen into the trap of working in a way that reflects disguised employment. The result is a staggering tax bill."
Meanwhile, IR35 expert at Re Legal Consulting Seeley, Rebecca Seeley Harris, weighed in on the difficulties faced by freelancers, noting: "It is getting more and more difficult to establish yourself as an independent contractor, and the framework of control is becoming the dominant factor again."
Maley pointed out: "The bigger picture is that HMRC sees IR35 compliance as a priority."
These developments follow a government report released earlier this month on IR35, which indicated that the reforms have brought in an additional £4.2bn in tax.
Despite this, experts have cautioned that the true impact of these changes "has been continually downplayed".