IR35 & Image Rights

For many UK contractors, the combination of IR35 tax rules and image rights feel like something not to have to every worry about. That is until a real-world case brings it into focus. The recent Bryan Robson Limited v HMRC tribunal decision has become a touchstone for anyone working through a limited company and wondering how different streams of income are taxed.

This article outlines the key lessons from that case and practical steps you can take to protect your business and tax status.

What Are the IR35 Rules?

IR35 refers to UK tax legislation designed to prevent so-called ‘disguised employment’. If you work through your own limited company but your working relationship with a client looks (and smells) like employment, HMRC can decide, after an investigation, that you’re a deemed employee – meaning you pay income tax and National Insurance contributions (NICs) as if you were on payroll. 

HMRC assess IR35 status using tests such as:

• Control: How much direction the client has over how work is done.

• Substitution: Whether your company can send someone else to do the work.

• Mutuality of Obligation: Whether you or the client must offer/take work. 

Getting this right in your contracts and actual working practices is essential, because being found ‘inside IR35’ can reduce take home pay significantly and/or trigger retrospective tax bills. 

Image Rights: What Are They?

Image rights are the commercial value of your name, photograph, likeness, reputation or personal brand. They’re most familiar in sport, entertainment and influencer work, but lots of contractors now generate value from their personal brand too – especially with the ever continuing boom of the internet and social media opportunities. 

When a client uses your appearance, testimonials, or brand in marketing, that use has commercial value that’s distinct from the work you perform personally. In theory, payments for licensing these rights can be treated differently for tax than payments for services performed. 

The Bryan Robson Case: A Split Decision

The tax tribunal in Bryan Robson Limited v HMRC offered a rare in-depth look at how IR35 interacts with image rights. 

1. Ambassador Services Were Deemed Inside IR35

The tribunal agreed with HMRC that, for certain years, Robson’s ambassadorial engagements, such as attending events and promotional appearances looked more like an employment relationship than independent contracting. This means:

• The nature of the duties, minimum commitments and control by the client suggested mutuality and control typical of employment

• Consequently, the income from those services was subject to IR35 rules and taxable under PAYE/NIC. 

2. Image Rights Were Treated Separately

Crucially, the tribunal recognised that image rights payments were distinct from personal service income. Payments to Manchester United for the club to use Robson’s name, image and likeness were not directly tied to his physical presence or duties and therefore fell outside the core IR35 assessment. 

However, and this is important, the contract did not assign a clear, separate value to the image rights versus the service fees, so the parties were directed to work out an appropriate apportionment. 

This was a significant result. The tribunal acknowledged that commercially valuable image rights can be carved out of an IR35 assessment, provided they are genuine and separable from the labour income. 

Why This Matters for Contractors

Whether you’re a designer, influencer, consultant or brand ambassador, the lessons from this case are broadly relevant:

1. Contracts Must Be Clear

If part of your income comes from licensing your image or brand, your contracts should:

• Seperate image rights from personal service fees

• Set out how long and for what purposes your image can be used

• Specify who owns or licenses the rights. 

Without this clarity, HMRC may argue that all payments were effectively for personal services, putting everything inside IR35. 

2. Apportionment Is Be Key

If a contract mixes earnings for services and image use, you need to be able to apportion the value between those components. The absence of an agreed valuation was a central issue in the Robson case. 

3. Working Practices Must Match Contracts

Tribunals don’t look only at contracts, they look at what actually happens. If you have the right to decline work or send a substitute, you should actually exercise it. Use a system such as the free, online one provided by The Contractor Compliance Portal to assess your IR35 status and download the results to save as evidence should HMRC come knocking.

4. Diversify Client Income

Heavy reliance on a single client can be a red flag for HMRC, suggesting dependency more akin to employment. 

Future Tax Landscape

The UK government signalled changes in recent budget announcements that could treat image rights income as taxable employment income from the 2027/28 tax year, reducing the historic tax advantage that image rights once carried. 

This highlights that even income legitimately structured outside IR35 may still need careful tax planning going forward.

Practical Tips for Contractors

✔ Ask a legal or tax professional to review your contracts

✔ Separate and value distinct revenue streams clearly

✔ Document your actual working practices

✔ Keep evidence of control, substitution rights and commercial negotiations

✔ Use a clear licence agreement for any use of your image or brand

✔ Cover your business by taking out IR35 Insurance.

Conclusion

The Bryan Robson case underscores that IR35 is about substance, not labels. Even high profile individuals can be caught by the legislation if their working arrangements resemble employment, but that doesn’t mean all income is the same. Image rights, when genuinely separate and valued, can sit outside IR35’s scope.

For contractors across the UK, the key lesson is simple: clarity and documentation matter – both in your contracts and in how you actually run your business.