What football referees can teach the construction industry about employment status

A recent tax case involving Professional Game Match Officials Ltd (PGMOL) reinforces an important message for the construction industry: employment status is determined by the reality of the working relationship on site, not by contracts or payment methods.

At long last, the tribunal ruled that professional football referees were self-employed, highlighting that legal employment status depends on factors such as mutuality of obligation, substitution rights and control. Other factors such financial risk and insurances are also relevant as to whether an individual is genuinely in business on their own account.

The decision is particularly relevant for construction businesses using the Construction Industry Scheme (CIS). Being paid under CIS does not automatically make a worker self-employed or a bonafide subcontractor. Contractors should regularly review their working arrangements to ensure they reflect what happens in reality.

Getting employment status wrong can lead to major tax liabilities, National Insurance costs and employment rights claims. The PGMOL case is a timely reminder that it's the reality of the working relationship, not the label attached to it, that matters most.