IR35 experts assess 'chief Twitterer' Gary Lineker’s chances of putting one past HMRC

Football pundit Gary Lineker resolving his Twitter spat with the BBC tees up the second half of his HMRC dispute over IR35 to be played out without distraction.

Not that ‘IR35’ actually has anything to do with why the Match of the Day presenter was earlier this month in the dock at the FTT, according to his legal representative.

In fact, on behalf of Mr Lineker, James Rivett KC said: “IR35 has nothing to do with it.

“They [HMRC] just looked in the wrong direction, and it proceeds from this assumption that a partnership is in some way an entity, and it isn’t, not this type of partnership.”

'HMRC looking where IR35 directs it to look'

Firing back for HMRC against the former England striker, Akash Nawbatt KC said: “HMRC is not looking in the wrong place, it is looking where the legislation directs it to look at.”

Nawbatt added that it is the partnership, Gary Lineker Media, that is liable to any tax, not the BBC or BT, where Lineker’s IR35-probed contracts ran from 2013-17 and 2015-18 respectively.

ContractorUK asked experts to almost play fourth official in the case against the soccer star, ahead of the First-Tier Tax tribunal ultimately deciding who is right, with a decision in the coming months.

'Entitled to 60% or more of profits'

Tax lawyer Rebecca Seeley Harris observes that IR35 is intended to hit partnerships that are set up to control the form in which income from relevant engagements is passed to a worker.

The legislation of 2000 is unlikely to cover partnerships that are genuine businesses, but which may at times second a partner to work for a client in an otherwise IR35-caught situation.

“Then, the following conditions must be satisfied for IR35 to apply [to partnerships],” the boss of ReLegal Consulting added. “First, the worker is entitled to 60% or more of the profits.

“Or second; most of the profits of the partnership derive from the provision of services from relevant engagements with a single client and that client’s associates.

“Or third, that under the profit-sharing arrangements, the income of any partner is based upon the income generated by that partner from relevant engagements.”

'General conditions of IR35 must also exist'

But even if the partnership conditions outlined above are satisfied, Seeley Harris continued, the IR35 legislation will only apply if the “general conditions” for IR35 are present.

The lawyer further reflected: “It is very likely that Lineker had a much higher proportion of the profits than his ex-wife, and the second criteria may also be satisfied -- as a large proportion of his work was from the BBC. 

“If HMRC are right, then this engagement does come under the IR35 legislation. If HMRC is wrong, then they would have to pursue the BBC as the ‘deemed employer,’ under the general rules for re-classification being self-employed.”

'What a mess'

Bauer & Cottrell confirms that if Lineker and his legal team succeed in their ‘going after the wrong party’ argument, it will be the BBC (and BT) which Lineker will land the tax bill on.

“And in that case, he could get all his tax and National Insurance Contributions back,” the specialist status advisory said. “What a mess this would cause!”

“But if Lineker loses, it will indeed be a first, as HMRC will have found a way to pin IR35 non-compliance, and this is old IR35 of course not the new off-payroll rules, to partnerships.”

Some contractor sector commentators can’t see Lineker ending up categorised as a BBC employee, even if he did start presenting Match of the Day as far back as 1999.

'Chief Twitterer Lineker certainly looks like a freelancer'

“[Lineker is a] commentator, radio broadcaster, podcaster, journalist and chief Twitterer of safe opinions -- [usually] -- so he certainly looks like a freelancer to me,” posted My Digital CEO John Whelan.

“If [he] is found to be inside IR35, then he probably needs to find himself a new tax lawyer, and a new contract negotiator, because it can surely only be the wording of his BBC contract that could let him down”.

Yet HMRC is “hell-bent” on “pursuing the rich and famous,” driven by the rationale ‘the more they earn, the more we can chase them for,’ says Kate Cottrell, formerly a tax inspector.

“These high-profile people are fortunate in that they have the money to defend themselves however,” the co-founder of Bauer & Cottrell also told ContractorUK.

“That’s in contrast to many of HMRC’s contractor sector targets. In the event of an HMRC victory over Lineker, it will be most interesting to see the result and learn how they won.”

'Complex, archaic, not fit for purpose'

Yesterday, Qdos implied that taxpayers being often defenceless to the tax office and its barristers is just one of the many reasons why chancellor Jeremy Hunt should use tomorrow’s Spring Budget 2023 to bring simplification or reform to taxpayers.

“The situation Gary Lineker finds himself in just goes to show how complex the tax system is,” says the firm’s Seb Maley. “It’s archaic [because] IR35… is based on decades-old case law that doesn’t reflect modern ways of working. It’s not fit for purpose.”

An IR35 contract reviewer, Mr Maley acknowledged that Lineker’s ongoing battle with HMRC might not, in the end, directly relate to IR35.

“The presenter’s legal representative [argues] that the contracts held between Lineker and his clients -- the BBC and BT Sport, were held personally, not via his company, Gary Lineker Media. 
“If this is accepted,” the reviewer said, “it could well be that the BBC and BT Sport are left with a tax bill, assuming Lineker’s engagements are deemed to be of an employed nature. Above all else, it just goes to show how complex and ambiguous employment status is.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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