The employment relationship in sport: employee or self-employed?

What do Deliveroo delivery drivers and Uber drivers have to do with the sports sector? Probably more than you would think at first glance.
This is because the current debates about false self-employment, authority relationships and the expiry of the enforcement moratorium also affect trainers, coaches and other self-employed sports professionals. This raises the question among sports associations and sports federations: is it still possible to hire self-employed people?

While sectors such as childcare, healthcare and education received a lot of media attention, the sports world remained largely out of the picture. Yet this industry too is on the brink of change. From 1 January 2025, the Tax Authorities will again enforce labour relations more actively. In doing so, there is now more clarity on the criteria for assessing those working relationships – and that means that sports organisations will have to take a critical look at their working methods.

End of enforcement moratorium: what does it mean for sports organisations?

From 1 January 2025, the Tax and Customs Administration will again actively check the correct use of self-employed workers. Until then, an enforcement moratorium applied: action was only taken in cases of deliberate and intentional sham constructions. But that is changing.

The end of the moratorium means that sports organisations must take a sharp look at the deployment of trainers, coaches and other sports professionals: are they actually self-employed or are they employees?

If the Tax Office judges that a working relationship is wrongly classified as self-employed, this can have considerable financial consequences. In that case, payroll taxes and contributions must still be paid, with retroactive effect – up to a maximum of five years back, but no further back than 1 January 2025. Interest and possibly a fine may also follow. Usually, the Inland Revenue issues a warning first, before any inspections take place. It is therefore wise for sports organisations to start checking and, where necessary, adjusting their partnerships with self-employed persons now.

Labour relations in sport: who is in charge?

When is someone truly self-employed and when does he or she actually function as an employee? In sport – as in other sectors – it revolves around three main pillars: labour, pay and authority. The authority aspect in particular is often decisive. If an organisation determines where, when and how work is to be done, employment is quickly established. Even if there is little steering in practice, but the possibility of steering does exist, this counts. Following internal protocols or practices may also indicate this.
The Tax Administration does not work with a simple checklist, but looks at the totality of circumstances – a so-called holistic approach. No individual aspect is decisive. In the well-known Deliveroo judgment, the Supreme Court outlined the route: first establish what agreements have been made and how they are complied with in practice (the explanation phase), followed by the test of whether this relationship fits within an employment contract (the qualification phase). What the parties intended is less important than what actually happens.

This assessment will include questions such as: is the assignment personal? How high is the fee? Does the contractor bear entrepreneurial risk? Does he or she actually behave as a self-employed person? And how intertwined are the activities with the client’s organisation?

On top of this, there is an additional layer of complexity: in the Uber ruling, the Supreme Court ruled that two people doing exactly the same work can still be qualified differently – depending on how they work and how independently they operate outside the assignment.

In short: practice is leading. Ultimately, the tax authorities decide whether a person is truly self-employed or still an employee. Even within the sports sector: a wrong assessment of the employment relationship can have serious financial and legal consequences.

Sham self-employment: a costly mistake

Imagine: a sports federation hires a coach as a self-employed person. On paper, everything seems correctly arranged. But when the Tax Administration carries out an audit and concludes that in reality there is an employment relationship, it can be very costly. In such a case, the union can be charged retrospectively – up to five years – for wage tax, social security contributions and tax interest.

The financial impact can be considerable. Although it is theoretically possible to still recover wage tax withheld from the coach, in practice this often proves complicated. Especially if the cooperation has since ended, the coach works elsewhere or is simply unable to repay the amount. Moreover, for employee insurance, the premiums due may not be recovered from the employee.

On top of that, a pension fund may still demand premium payments over the relevant period, which further increases the damage. Especially for smaller sports organisations or associations with limited financial resources, such retroactive levies can be a major risk. Those who are insufficiently prepared for these rules can unwittingly put themselves – and the organisation – in dire straits.

The grey area: employee or self-employed?

Should sports organisations put everyone on the payroll, or is it still possible to hire professionals as self-employed? In practice, the distinction often proves difficult to make. Take, for example, a physiotherapist with his own practice, who is only used during tournaments and enjoys a lot of freedom in the process – chances are that this person will be classified as self-employed. A talent coach who works full time for a sports federation, carefully following instructions, will in turn be more likely to be seen as an employee.

The challenge lies mainly in the situations in between. What if a top foreign coach seems independent – with several clients, his own methods and little guidance – but gradually comes under the influence of the organisation? Think of interim evaluations where the association makes adjustments, or a technical director who influences the working methods or team strategy. Then the nature of the cooperation changes, and what appears to be an assignment agreement on paper may in practice still be regarded as an employment contract.

Time to act

For sports organisations, it is essential to critically review their collaborations and contracts. It starts with an accurate analysis of the working relationship: does the contractual form match how collaborations are done in practice? In many cases, it is advisable to seek legal or tax advice to get a clear picture of the risks.

With the expiry of the enforcement moratorium, doing nothing is no longer an option. A wrong assessment can have major consequences – for both the sports professional and the organisation. Timely action and ensuring clear, well-founded agreements is therefore crucial to avoid future problems.