Image rights have always sat in a slightly awkward place in UK tax. They feel commercial because they are commercial. A person’s brand is something that can be licensed, exploited and monetised. But after the case of former Manchester United player Bryan Robson, HMRC’s response was the Budget announcement that what is labelled “image rights” is really just reward for employment, and should be taxed as earnings.
The Bryan Robson litigation shows the tension in full. It also helps explain why the government has now announced a new statutory approach that aims to shut the door on the argument entirely.
What advisers mean by ‘image rights’
In simple terms, an image rights arrangement is usually a licence. An individual (often via a company) grants someone the right to use their name, likeness, signature, voice or other brand attributes in marketing and promotional activity.
In sport and entertainment, this often sits alongside, or inside, an employment or services relationship. Clubs and broadcasters do not just want performance. They want the commercial halo: content, publicity, sponsorship activation and credibility.
HMRC’s concern is not that image rights exist. It is that the label can be used to re-characterise what is, in substance, pay for work. The line between “I paid you to play/present/appear” and “I paid you to let me use your image while you play/present/appear” is where the arguments live.
The FTT decision in a nutshell
The first tier tribunal (FTT) case involved Bryan Robson’s personal service company and an ambassador agreement with Manchester United that contained image rights terms.
The tribunal treated the agreement as a composite one, dealing with two distinct things: personal appearances and a licence of image rights. That point matters because it framed the rest of the analysis. The judge rejected the idea that the deal was “essentially” about image rights with appearances as merely ancillary.
On IR35 itself, the tribunal concluded that the hypothetical direct contract would have been one of employment, so the balance of the consideration was employment income under IR35.
But what was interesting was the tribunal’s approach to apportionment. It found, in principle, that part of the consideration was attributable to the licensed image rights and, to that extent, it was not attributable to the obligation personally to perform services and therefore did not fall to be taxed under IR35.
Quantum debate
The tribunal explicitly envisaged the quantum debate. In that, an argument could be run that some consideration linked to the fact that Robson would be photographed and used in online/social content was “inextricably linked” to the image rights licence rather than the personal provision of services.
The tribunal acknowledged that the agreement itself contained no apportionment and that valuation discussions had not taken place, which is exactly the kind of fact pattern that HMRC doesn’t like.
The Robson appeal story
HMRC sought permission to appeal against the image rights part of the FTT decision, and permission was granted.
Robson’s company, responding under Rule 24 in the upper tribunal (UT), also sought permission to appeal the IR35 decision. The UT judge granted permission on two grounds (broadly, complaints about the FTT building image-rights aspects into the hypothetical employment contract, and about exclusivity of image use), but refused permission on a third ground.
The reconsideration decision (following an oral renewal hearing) is important, mostly as a reality check on how hard it is to overturn detailed fact-finding. The UT reiterated that appeals are on points of law only, and that Edwards vs Bairstow type challenges to findings of fact face a high hurdle. It refused permission on the third ground again, in part because the disputed findings were not shown to be materially relevant to the FTT’s IR35 conclusion.
So the litigation continues, but with the scope of the taxpayer’s IR35 challenge narrowed.
Employment means employment
Against that background, Budget 2025 included a very direct policy response.
The government says it will legislate to clarify the tax treatment of image rights so that all image rights payments related to an employment are treated as taxable employment income and subject to income tax and both employer and employee national insurance contributions (NICs).
The change is scheduled to take effect from 6 April 2027, and is expected to be legislated in Finance Bill 2026/27.
The published policy costing is clear: it frames the measure as making all payments for image rights “related to an employment” taxable as employment income, and explicitly says it includes deemed employments.
In other words, the future argument is not meant to be how much of this is image rights versus earnings? It is meant to be: if it relates to employment, it is earnings, full stop.
Related to employment
So what does “related to an employment” actually mean?
HMRC’s existing public guidance already draws a bright line: payments for the duties of employment must be taxed as earnings through PAYE, not treated as image rights. The Budget proposal looks like it will harden that principle into a statutory rule for employment.
Accountants and advisers should now do the following.
Map exposure: Identify clients with image rights companies or clauses in employment/engagement contracts, especially in sport, media and influencer-heavy brands.
Review contract mechanics: Who is paying, what is being paid for, what evidence exists of a separate commercial right and what happens on termination? The Robson decision underlined how quickly a tribunal can view an agreement as a composite deal that includes personal services and image rights together.
Get ready for PAYE and NICs: If the legislation lands as announced, the compliance burden will move towards payroll treatment for anything in scope, including potentially employer NIC cost that was not priced into deals.
Expect dispute migration: Today’s disputes often turn on valuation and apportionment. Post-April 2027, disputes are more likely to turn on whether a payment is “related to” employment at all, plus transitional and anti-avoidance provisions.
The forward-looking take
The Bryan Robson case showed that tribunals can be willing, on the right facts, to treat image rights as a genuinely separable element requiring apportionment. The Budget announcement signals that the government does not want that debate continuing where an employment or deemed employment relationship is in play.