Gary Lineker, the former captain of England’s football team – you may have heard of him – has just scored against HMRC winning an appeal over a £4.9m tax bill. The taxman was pursuing the Match of the Day presenter over taxes on income from both the BBC and BT Sport where he also had a contract from 2013 to 2014 and 2017 to 2018, writes David Little, a partner in our Corporate and Commercial Law team, who also handles Sports Law cases.
This of course is a personal tax matter, but the 1.5 million freelancers up and down the country will have another reason to applaud Lineker if Tribunal Judge John Brook’s ruling in the case sticks. HMRC said he was an employee of both broadcasters but His Honour ruled Lineker was a freelancer and had contracts with both broadcasters.
“The effect of my conclusions is that because there were direct contracts, between the BBC and Mr Lineker and BT Sport and Mr Lineker, the intermediaries legislation (IR35) does not, and cannot as a matter of law, apply,” Judge Brooks said in a statement.
“Accordingly, and notwithstanding GLM (Gary Lineker Media) being a partnership, that is the end of the matter and the appeal succeeds.”
IR35 is designed to clamp down on tax avoidance by so-called disguised employees, who charge for their services via limited companies. IR35 will also be applied even where a freelancer holds down two or more jobs, so long as one of the contracts occupies more than 50% of a freelancer’s time.
As the BBC reported here last month Mr Lineker’s lawyer James Rivett KC told a preliminary hearing in London that the star had been “dragged through the papers accused of not paying income tax which has been paid”, and claimed there was a political element to the investigations.
Following yesterday’s ruling Gary did what he usually does, he went onto Twitter: “I had already paid all tax due at the top rate and happily so. I’m totally flabbergasted as to why I was expected to pay double. Thankfully justice was done.”
The HMRC does not see it that way at all. Following the ruling an HMRC spokesperson said: “The tribunal has confirmed the off-payroll rules apply to partnerships, as we have always said. However, we do not agree with its decision that the rules cannot apply in this case and we’re considering an appeal. It is our duty to ensure everyone pays the right tax under the law, regardless of wealth or status.”
HMRC has 56 days to appeal to the Upper Tribunal (Tax and Chancery Chamber).
I think it highly likely this match will go to extra time.
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David Little is a Partner at Bishop & Sewell in our expert Corporate & Commercial team. If you would like to contact him, please quote Ref CB388 on either 020 7631 4141 or email email@example.com.
The above is accurate as at 30 March 2023. The information above may be subject to change during these ever-changing times. The content of this note should not be considered legal advice and each matter should be considered on a case-by-case basis.