Former Liverpool footballer Thompson loses £300k tax battle

Phil Thompson, the former Liverpool footballer, has been ordered to pay £300,000 in back taxes relating to his time as a pundit for Sky Sports.

The ex-Liverpool captain and England player was told he owed income tax and National Insurance contributions after HM Revenue and Customs argued that he should have been taxed as an employee rather than a self-employed contractor.

Mr Thompson set up a limited company in 2013, which he used to receive payments for his appearances on Soccer Saturday, a weekly television programme.

The former footballer had argued that his work for Sky from 2013- 14 to 2017-18 took up a relatively small amount of his time, but HMRC said it had made up a substantial majority (80pc on average) of his earnings.

Mr Thompson lodged an appeal after a previous ruling in favour of HMRC but a first- tier tribunal dismissed it earlier this week.

The case centred around so- called off-payroll working rules – or IR35 – which dictate how workers who provide their services through an intermediary such as a limited company are assessed for tax purposes.

If they are deemed “outside IR35”, they will be taxed as a self- employed worker. If they are “inside IR35”, they will be taxed as an employee.

The tax office has won 70pc of employment status and intermediary hearings at tribunal and the Court of Appeal since 2020. These include cases brought against Red, White and Green Ltd – the personal service company of Eamonn Holmes. However, HMRC has also lost cases against other presenters such as Gary Lineker, Kaye Adams and Adrian Chiles.

Seb Maley, of contractor specialist Qdos, said: “In our experience, the vast majority of freelancers and contractors can demonstrate that they are genuinely self- employed and businesses can compliantly engage them this way.”

Mr Thompson is able to appeal. He declined to comment.

An HMRC spokesman said: “We welcome the tribunal’s decision, which confirmed our position that certain services provided fell within the off-payroll tax rules.”