Clark, who stepped down from his role as the presenter of Sky Sports' darts coverage in July last year, was found to owe both income tax and national insurance to the taxman after losing his appeals case at a tribunal.
A First Tier Tribunal deemed the contracts held between Clark’s limited company, Little Piece of Paradise, and Sky, from 2013 to 2018, each resembled an inside IR35 contract.
IR35, first introduced in 2000 by then-chancellor Gordon Brown, is an anti-tax-avoidance rule that applies to all contractors and freelancers who don’t fall under HMRC’s definition of being self-employed.
It is designed to crack down on workers supplying their services to clients through an intermediary, such as a limited company, but who would be effectively an employee if the intermediary was not used.
The judge ruled Clark should have been paid directly as a Sky employee but instead the pay was passed through his own personal service company.
The tribunal found there was mutual obligation between the presenter and Sky for this to be classed a contract of service.
In particular, Clark was required present Sky's coverage of darts events as and when required.
The tribunal said there was a contractual payment of £150,000 per year in return for the services but it appeared Sky had no
obligation to provide continuous work. If Clark had refused or failed to perform these services, he would have been in breach of contract, the tribunal said.
Judge Heidi Poon said: "We are satisfied that no factors existed which were inconsistent with the affirmative conclusion that the contractual arrangements between Sky and Mr Clark would have been a contract of service for the duration of the entire relevant period from 1 August 2012 to 31 July 2018 for the purposes of the IR35 legislation."
As a result, Clark is expected to repay HMRC missing income tax and national insurance contributions for the period in question.
Seb Maley, chief executive officer of IR35 specialist Qdos, said Clark was another victim of the “complex” IR35 legislation.
Maley said: “A high profile victory for HMRC may concern contractors and businesses, but the fact of the matter is that Clark’s working relationship with Sky - like many other presenters - was quite different to ones held by typical contractors. It’s also possible that Clark may appeal the case again and overturn this decision."
He added: “Ultimately, the judge’s view was that Clark was subject to control by Sky, who also paid him whether he worked or not. What’s more, he was restricted from presenting for other companies, which the judge believed painted a picture of employment rather than self-employment. But to reiterate, this certainly isn’t the case across the board.”
Dave Chaplin, CEO of compliance solution IR35 Shield, said: "I have every sympathy for Dave Clark and know he will be disappointed to have lost his case. Media cases like these are unique and very fact dependent.
“Much of the hypothetical contract that was formed was based on terms that were derived via implication from statements made by witnesses under cross-examination during the hearing.
"Many of these media presenters’ contracts appear to be boilerplate, with additional arrangements having been agreed verbally. That can present a considerable challenge many years later in attempting to argue a case - memory fades faster than ink.”
There have been a number of IR35 cases against TV presenters in the past with Kaye Adams, Lorraine Kelly and Helen Fospero, as well as IT consultant Richard Alcock, having all won their cases against HMRC.
However, broadcaster Eamonn Holmes lost his case and Gary Lineker, a former footballer who made 80 appearances for England, has also been accused by HMRC of passing himself off as a freelancer in his role as a TV presenter.
amy.austin@ft.com
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