Gary Lineker is the latest in a long line of TV presenters who have been challenged by HMRC in relation to the IR35 legislation.
The amount of Income Tax and National Insurance at stake was in the region of £4.9m, so not an insignificant sum. Unlike most IR35 cases, HMRC pursued their claim that the ‘intermediaries legislation’, often referred to as IR35 legislation, applied to the partnership which was in place between Lineker and his ex-wife, Danielle Bux. In February 2013, both signed an agreement for the provision of Lineker’s services as a TV presenter, mainly fronting the Match of the Day programme on the BBC. The agreement covered the period 1 July 2013 to 30 June 2016. Further agreements were later entered into by Lineker with BT Sport, under his trading name Gary Lineker Media (GLM) and a further contract with the BBC running between 2015 and 2018.
HMRC contacted GLM in April 2017, requesting details of the partnership income. It was at this stage that HMRC advised they were not enquiring into the partnership’s tax return, but instead asked whether the partnership had considered the ‘intermediaries legislation’.
HMRC raised Income Tax determinations under Regulation 80 of the Income Tax (Pay As You Earn) Regulations 2003 ,for the years 2014/15 and 2016/17, and National Insurance determinations under Section 8 of the Social Security Contributions Act 1999, for the years 2013/14 to 2017/18. The total liabilities being pursued totalled £4.9m.
The First Tier Tribunal found that the IR35 legislation did not apply to GLM because the contracts were entered into directly between Lineker and both the BBC and BT Sport, not via an intermediary. Consequently, HMRC’s appeal was dismissed.
However, it is expected that HMRC will appeal the decision since under IR35 legislation, an intermediary can include a limited company, partnership or individual. HMRC has 56 days to appeal to the Upper Tier Tribunal.
If you have any concerns regarding the application of the IR35 legislation, or HMRC has opened an enquiry into your arrangements, please contact either Danielle Ford, Head of Tax Disputes, or Nick Bustin, Employment Tax Director, to discuss matters further.
