News · Recruitment Agencies & Umbrellas · OPRaaS Platform
Employment status decides how a temporary worker is paid, how they are taxed, and which rights they carry. It is one of the first judgements an agency, umbrella company or end-hirer makes about anyone they take on, and one of the easiest to get wrong.
On 1 July 2026, writing for the FCSA, Helen Pearson of Brabners set out the lessons from the latest turn in a decade-long tax case. A First-tier Tax Tribunal has concluded that match fees paid to football referees were not employment earnings for tax or National Insurance. The referees were engaged under contracts for services, not contracts of employment.
The sporting setting is incidental. As the FCSA piece notes, the ruling is a reminder for any business across the labour supply chain, umbrella companies and recruitment agencies included, of how much rides on assessing status correctly. Get it right and the exposure sits where it belongs. Get it wrong and it does not stay put.
What the tribunal actually decided, and what it means
HMRC had assessed around £580,000 of PAYE and National Insurance on match fees for the 2014/15 and 2015/16 tax years, on the figures set out in the decision.
The employment status question had already reached the Supreme Court, which in September 2024 held that each accepted appointment carried the minimum mutuality of obligation and a sufficient framework of control, then sent the case back to the tribunal for the final stage of the classic Ready Mixed Concrete test.
That final stage is a holistic one. The tribunal concluded that, taken in the round, the individual engagements were not employment. Referees could decline or withdraw without penalty, and the control exercised over them was largely regulatory rather than the day-to-day supervision an employer applies. HMRC has since decided not to appeal, which draws a line under more than ten years of argument.
One point stands out well beyond football. Mutuality and control were both present, and the engagement was still not employment.
Why status turns on working practice, not paperwork
This is the part that matters well beyond football. Employment status is not settled by the label on a contract. It is settled by how the relationship works in practice: who controls the work, whether there is an obligation to offer and accept it, whether the worker can send a substitute, and whether they are genuinely in business on their own account.
The OPRaaS Labour Supply Chain Assurance course makes the same point in plainer language. Its Module 9 contract-compliance content tells firms to address the status factors directly, control, right of substitution and mutuality of obligation, and it is explicit that actual working practice prevails over the wording of the contract. A well-drafted agreement helps. It does not decide the question on its own.
That is why a status decision cannot be a box ticked once at onboarding. The label follows the practice, and the practice can drift.
Where a wrong employment status call passes upstream
The reason status carries weight is money and liability, and neither stays with the worker. If a person treated as self-employed is later found to have been an employee, the unpaid PAYE and National Insurance become the engager’s problem, often with interest and penalties on top. In the labour supply chain, that exposure passes upstream to whoever ran the payroll and, in many arrangements, to the businesses above them.
Construction shows the sharpest version. The OPRaaS course notes that where the agency rules in section 44 of ITEPA 2003 apply, because a worker is under the supervision, direction or control of any person, PAYE must be operated instead of paying them gross as a Construction Industry Scheme subcontractor. Misread that test and the deductions are wrong from the first payment.
For a recruitment agency placing hundreds of workers, or an end-hirer relying on a chain of suppliers, a single misclassification rarely stays single. The same engagement model tends to be repeated across a whole cohort, so one wrong reading multiplies quietly until someone asks to see the basis for it.
Assessing employment status across a moving supply chain
Many organisations do run a status check. The gap is that they run it once, at the start, and rarely again, even as the working pattern changes. A worker taken on for a defined task under light-touch oversight can, over months, end up integrated, directed and effectively supervised. The paperwork still says self-employed. The practice no longer agrees.
HMRC publishes a tool for the initial call, Check Employment Status for Tax, and it is a sensible starting point. What it cannot do is keep the decision current, or hold the evidence for it, or flag when the working practice has moved far enough to warrant a fresh look. That is a supply chain assurance job, not a one-off form.
The OPRaaS Module 9 discipline treats it that way. It asks whether the written particulars are issued on or before day one, whether the document reflects the right status and contract type, and whether contracts are reviewed and updated rather than filed and forgotten. The test is continuity, not a single correct answer captured at the door.
How the OPRaaS Virtual Compliance Director keeps status evidenced
This is the work the OPRaaS Virtual Compliance Director (OPRaaS VCD) platform is built to carry. It embeds senior governance leadership into an end-hirer or agency without the cost of a full-time director, and builds audit-ready controls across right-to-work, IR35, CIS, GLAA and modern-slavery duties that stay current as workers and suppliers change.
Two examples make it concrete. Employment status is assessed at onboarding against the real working practice, recorded with the reasons behind the decision, and re-checked on a risk-based cadence, so a drift from self-employed to worker is caught rather than discovered in an enquiry. Each supplier agency and umbrella is monitored against Companies House for director and ownership changes, and against Creditsafe for credit-risk moves such as county court judgments and financial-strength downgrades.
OPRaaS, On-Pay-Roll-as-a-Service, is a systemised governance and workforce management partner for organisations that rely on temporary, contractor and contingent labour, from recruitment agencies and end-hirers to umbrella companies, managed service providers and public sector buyers. It is approved on the UK Government Commercial Agency (formerly Crown Commercial Service) frameworks including RM6310 Audit & Assurance Services (Lots 2 & 4), RM6219 and RM6237 Learning & Training Services DPS.
Getting employment status right is cheaper than getting it wrong
The referees case took more than a decade and reached the Supreme Court before it was settled. Few engagements are worth that fight, which is exactly why the everyday discipline matters more than the landmark ruling. Assess status on the real working practice at the point of engagement, write down the reasons, and revisit the decision when the relationship changes.
The firms that do this keep the tax exposure with the party that created it, and can show their working on the day HMRC, a client or an auditor asks. For agencies, end-hirers and public sector buyers weighing how to assure their labour supply chain, an employment status decision that is evidenced and kept current is worth far more than one that was simply made.
Status is decided by how the work is really done, not by the label on the contract. That is why it has to be assessed, evidenced and kept current, rather than filed once and forgotten.
Compliance is your asset. Evidenced daily.
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Drawing on Helen Pearson, published on 1 July 2026 for the FCSA; the First-tier Tax Tribunal decision in Professional Game Match Officials Ltd v HMRC and the 2024 Supreme Court judgment that preceded it; HMRC guidance on Check Employment Status for Tax, employment status and the Construction Industry Scheme; section 44 of ITEPA 2003; and the OPRaaS LSCA Self-Certification Course Module 9.
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This article is editorial commentary by OPRaaS Limited (On-Pay-Roll-as-a-Service), drawing on published industry reporting. It is general information, not legal, tax, employment or compliance advice. Obligations vary by organisation and engagement. Speak to a qualified professional before acting on any specific position.