Gary Lineker targeted by HMRC over £4.9m IR35 bill

BBC presenter Gary Lineker is currently being chased by HMRC for £4.9 million in taxes and national insurance. During the First-Tier Tribunal released in April, it was declared that the Match of the Day presenter was inside IR35.

Lineker was working through his limited company Gary Lineker Media (GLM), owned by him and his wife at the time, Danielle Bux. In the ruling, made by Judge John Brooks, it is stated that “during the tax years 2013-14 to 2016-17 (inclusive) Mr Lineker contracted to provide his services to the BBC through GLM Ltd. He also provided his services to BT Sport through GLM Ltd during the tax years 2015-16 to 2017-18 (inclusive). HMRC considered that such arrangements fell within the ambit of the intermediaries legislation (generally known as IR35).”

HMRC chasing Lineker for years of tax back payments

HMRC are attempting to collect years of back payments amounting to a staggering £4.9 million. Kingsbridge’s Head of Tax and resident IR35 expert, Andy Vessey, comments:

“This dispute has clearly been rumbling on for some years and is one of those rare cases that involves a partnership rather than a PSC. This recent hearing was an application by Lineker to amend his grounds of appeal, which the judge allowed, so the full showdown is yet to come. From the few facts that we do know, Lineker’s work as a football presenter for the BBC (06.04.13 – 05.04.17) and BT Sport (06.04.15 – 05.04.18) was provided via a partnership with his ex-wife, which traded as Gary Lineker Media.”

With HMRC looking to claw money back following a year of pay-outs as a result of the coronavirus pandemic, Vessey comments that Lineker could well be in this for the long haul. “They are not going to give that pot of gold up lightly, particularly during a time when the Treasury needs every penny it can get its hands on.”

Why has Gary Lineker been ruled inside IR35?

Andy Vessey notes that “One may suppose, and not unreasonably so, that Lineker may well fail the three key tests of control, personal service and mutuality of obligation (MOO). This being the case, then his defence might have to rely on the business on its own account test that the Upper-Tier Tribunal recently emphasized in the case of Atholl House Productions Ltd (Kaye Adams).”

“Even then” continues Vessey, “it must be remembered that the Upper-Tier Tribunal acknowledged that “the mere fact that a person carries out some business on their own account in a tax year, does not prevent even similar activities from being undertaken as an employee” and that “there may be some material factor arising out of the years…. under consideration that justify a different characterisation.””

Lineker follows in footsteps of Eamon Holmes and Kaye Adams

Lineker is the latest TV figure to be subject to an IR35 investigation, following other high-profile television personalities including Eamon Holmes and Kaye Adams. In the case of Adams, who operated under the limited company Atholl House, it was deemed in an upper-tier tribunal that 20 years of freelance employment helped swing the decision in her favour, ultimately being deemed as outside IR35.

However, this ruling will not necessarily have much bearing on any appeals put in place by Lineker. As Vessey comments, “Kaye Adams was a freelance journalist, which is very different in nature to a front of camera presenter. It is going to be interesting to see how this plays out, but Lineker may well need extra time and penalties if he is to win this particular battle!”.

Changes to the off-payroll rules

This announcement of Lineker’s tribunal comes just weeks after the IR35 reform, which came into effect on the 6th of April. The shift in the off-payroll legislation has seen the responsibility for IR35 status shift from limited company contractors to the fee-payer.

As HMRC are seeking payments from previous years, then the responsibility for assessing IR35 status and paying any required NIC and tax payments would sit with Lineker, not the BBC.

It’s worth noting that in some instances, contractors are still responsible for assessing their own IR35 status, for example when working for a small company. As a contractor, you may also want to check your IR35 status to help try and swing a status determination in your favour.

There are a variety of IR35 tools available to check your status, one option you could consider is Kingsbridge’s award-winning IR35 status tool. Kingsbridge’s tool, developed by Head of Tax Andy Vessey, is currently the only hybrid status tool on the market – an automated result, with manual intervention by an IR35 expert team for any indeterminate results.

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