29th June 2023
Written by Qdos Contractor
Match of the Day host to head to upper tribunal as HMRC renews attempts to recoup £4.9m in contested taxes
HMRC has
lodged an appeal against Gary Lineker’s tribunal ruling, as the tax office continues to ramp up its IR35 compliance activity.
The action will see HMRC resume its protracted pursuit of Lineker over an estimated £4.9m tax bill, accrued over several years and across multiple contracts. The presenter, though, argues that he has always paid his taxes in full.
However, at a first-tier tax tribunal earlier this year, Judge John Brooks found
“there were direct contracts” in place between Lineker, the BBC and BT Sport. This meant that
“the intermediaries legislation (IR35) does not, and cannot as a matter of law, apply”.
As yet, no date has been fixed for the Upper Tribunal hearing. But if the appeal is successful, Lineker could face a tax bill for the outstanding liability, minus any taxes already paid through his company – reducing the overall amount due.
Lineker’s IR35 saga up to this point
HMRC first opened its investigation into Lineker’s tax affairs as far back as April 2017, focusing on three contracts.
Two of these were held between Lineker and the BBC (one spanning 2013-2016 and a second 2015-2020) and one with BT Sport (2015-2018). The tax authority alleged that Lineker had wrongly operated outside of IR35 across these, accruing a total tax liability of £4.9m as a result.
However, several years of investigation culminated in a three-day hearing, from 27th February until 2nd March this year.
After both sides had put forward their argument, Judge John Brooks concluded:
“When Mr Lineker signed the 2013 BBC Contract, the 2015 BBC Contract and BT Sport Contract for the provision of his services, he did so as principal thereby contracting directly with the BBC and BT Sport. As such, the intermediaries legislation cannot apply”.
At the time, our CEO, Seb Maley, told the
FT Adviser that HMRC’s case was a result of the
“ambiguous, fundamentally flawed” IR35 legislation and said it
“illustrates everything wrong with HMRC’s approach to IR35 compliance”.
HMRC’s continued campaign against high-profile presenters
In recent years, a number of high-profile individuals have been subject to lengthy IR35 cases carrying staggering sums in tax.
Lineker – the face of BBC’s Match of the Day show – is one of many presenters to have their IR35 compliance investigated.
Other presenters have also been caught in HMRC’s crosshairs – from Lorraine Kelly and Adrian Chiles to Eamonn Holmes, as well as several pundits and commentators for Sky Sports.
Despite HMRC’s attempts to win cases in the public eye, the tax office has an inconsistent record.
Kelly and Chiles both successfully appealed rulings made against them, overturning tax bills of £1.27m and £1.2m respectively. At the same time, Holmes and a number of Sky Sports contractors have been unsuccessful, though the tax liabilities in these cases have been lower.
What does the move mean for contractors and engagers?
HMRC’s appeal is arguably a statement of intent, and it would make for a high-profile win.
The £4.9m contested tax at stake is a significant sum. The case demonstrates HMRC’s aim to maximise tax revenues through IR35, but also its commitment to investigating historic contracts as part of its compliance activity. Contractors and businesses are both at risk of IR35 investigation.
If the appeal is successful, there’s also a chance that HMRC could begin to target partnerships more aggressively, too.
With this in mind, ensuring IR35 compliance is vital and offers the first line of defence against potentially lengthy and expensive legal proceedings. Comprehensive insurance policies covering tax enquiries and liabilities will also offer ultimate peace of mind.
