IR35: What Gary Lineker’s win, and Eamonn Holmes’ loss, means for contractors

More comprehensively than most, ContractorUK has reported the details of these two massively high-profile IR35 cases, but there are a few pointers that contractors can take from Gary Lineker’s win and Eamonn Holmes’ loss, particularly if they are in need of some comfort, writes status specialist Kate Cottrell of off-payroll rules advisory Bauer & Cottrell.

Gary Lineker

• No you do not have to be an expert in general partnership law to understand the findings in this case. I doubt that most IR35 ‘experts’ have the first clue about the legal implications of general partnerships and certainly not how these laws interact with IR35 in this way.
• HMRC are “considering” an appeal but even if they win an appeal, there is still a long way to go, as this case only concerns whether or not IR35 can apply. IR35 has not been tested.
• £4.9million is a staggering amount but it is not accurate. The only thing at stake here is National Insurance. Tax has already been paid, as has Class 2 and Class 4 (based upon profits) NIC, so we are really looking at a fraction of £4.9m if this is pinned on Gary Lineker with his partnership being found to be the intermediary.
• HMRC has other options if they lose any appeal. They could go after the BBC and/or BT Sport for the ‘missing’ millions.  So, again, an awful long way to go.

Some comfort…

It is highly unlikely that most contractors can compare themselves to Gary Lineker, and I don’t mean in terms of keepy-uppies! It will be many months if not years before Lineker’s case is finally settled. While HMRC continues to tackle those that have “wealth and status,” that means there are less resources to investigate you (the typical taxpayer), which should provide a bit of comfort.

Eamonn Holmes

• To properly understand this 2023 judgment you need to see the original IR35 case against Mr Holmes, back in 2018. In this appeal, the Upper Tribunal were unable to find any errors of law in that first 2018 case, which is why the appeal was lost.
• If we take a look at the usual IR35 status tests, Eamonn Holmes lost the lot. No substitution rights; Mutuality (his defence and HMRC both agreed there was MOO) and a right of control over, what, where, when and how. Oh, plus other factors that clearly show none of the usual ‘in business’ features, alongside the provision of certain benefits by ITV.
• Paragraph 265 of the original FTT judgment is extremely unhelpful to Mr Holmes. Other than providing his own ear piece (common for most presenters) he was provided with a car -- and a driver, provided with clothing – some £5,000 to £6,000 per annum; ITV paid for his insurances, ITV prepared and raised his invoices, and ITV would still have paid him even if the show was cancelled and invoices were paid before the contracts were signed. Worse still? All this was going on for some 15 years!

Lots of comfort…

A short read of the bullet points above show that Mr Holmes was a million miles away from a typical contractor outside IR35. And further in my experience, most limited company contractors – even those who come to us for assistance -- would have IR35 alarm bells ringing loudly in their ears if the contents of paragraph 265 applied to them. 

In summary, there is not much to take from the Gary Lineker ‘IR35’ case but a whole lot to glean from the Eamonn Holmes IR35 case.

One final thought on why Mr Holmes is a good example of what-not-to-do. At the FTT, Holmes said he “very rarely” reads any of his contracts. And you can understand that, perhaps, because he had an agent. But ultimately, to not read the agreement to which he has agreed has cost him dear, and is a real lesson for all:

Read your contracts (or get some help), review your contracts and be certain that they accurately reflect the reality of the working practices.