Federation of Irish Sport navigates new Revenue guidance with tax and legal support from Ogier

Ogier in Ireland recently supported the Federation of Irish Sport and various national governing sport bodies with tax and legal reviews following the Supreme Court’s landmark decision in the Karshan (Midlands) Ltd t/a Domino’s Pizza case, which clarified the employment status of contractors under Irish law.

This ruling, and Revenue’s subsequently updated guidance, has prompted many national governing sport bodies and federations to critically re-examine how they engage with individuals providing services. This article outlines what organisations need to know. 

Background

The Revenue Commissioners of Ireland pursued a long-running case against Domino’s Pizza regarding the employment status of its delivery drivers. After seven years of litigation, in 2023 the Supreme Court ruled that the drivers were in fact employees, rather than independent contractors, introducing a definitive five-step test to be applied in all future cases.

Impact of the judgment 

The five-step test for determining whether individuals are employees or independent contractors must now be applied to existing and future relationships with service providers. 

Although this query of employment status has been tested many times historically, this judgment now establishes a clear methodology that organisations in Ireland must now follow. 

A key concern for many sporting bodies is how to interpret their arrangements in light of this ruling.

Revenue’s updated guidance

Following the ruling, Revenue issued extensive and regularly updated guidance. Several sectors are specifically referenced, and Irish businesses, including sporting bodies, are urged to review their arrangements with individuals providing services to ensure their contractual and payroll structures meet legal requirements and avoid unexpected tax liabilities.

In the Karshan (Midlands) Ltd t/a Domino’s Pizza case, Karshan argued that delivery drivers were independent contractors engaged under contracts for services, and therefore payroll taxes did not apply. Revenue argued that the drivers were employees under contracts of service and subject to PAYE, supporting the Supreme Court ruling. 

How Ogier can help 

By engaging in thorough tax and legal reviews, sporting organisations can gain a clear understanding of the implications of the Supreme Court’s assessment, assess any potential risks in their current arrangements and be prepared to respond to future Revenue queries.  Working alongside Ogier’s dedicated Sports team, our Tax Disputes team is available to assist with Revenue audits. 

We ensure that client objectives are met on time and on budget across a broad range of tax disputes. We are recognised for our expertise resolving large, complex and high value disputes and our Dispute Resolution experts have successfully acted in the Tax Appeals Commission and litigated in all courts, including the Irish High Court, the Irish Commercial Court, the Irish Court of Appeal, the Irish Supreme Court and Court of Justice of the European Union. Contact our experts in Ireland via the contact details provided below.

About Ogier

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

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