HMRC lodges appeal against Gary Lineker’s 'IR35 case' win

HMRC has quietly filed an appeal against a high-profile IR35-related decision earlier this year in favour of Match of the Day presenter Gary Lineker.

The Revenue’s June 12th filing is confirmation that it disagrees with the First Tier Tribunal’s March decision that IR35 cannot apply, as a matter of law, to Mr Lineker’s engagements.

Put another way, HMRC appealing at the Upper Tribunal over Lineker’s stints at the BBC and BT Sport, between 2013 and 2018, means it isn’t prepared to let “sleeping dogs lie”.

'Sleeping dogs'

Tax dispute expert Tom Wallace fleshed out his assessment: “FTT decisions do not set precedents, so many [commentators] thought they [-- HMRC --] might let sleeping dogs lie.

“[But clearly HMRC aren’t] happy with the court’s view that although general partnerships are specifically caught by IR35, entering a contract as principle… [is outside its] crosshairs.”

Now of WTT Group, having been a HMRC inspector, Wallace was referring to the FTT finding that Lineker himself, and crucially not his partnership, entered into the BBC/BT contracts.

'People following the precedent set by Lineker'

Online on Friday, accountant Carly Shaw asked whether the fear of the England football team’s former captain ‘setting an example’ to others is behind HMRC’s appeal.  

And in comments he sent on the same day to ContractorUK, senior tax dispute manager at Haysmacintyre, Riocard Hoye, says that such a fear is indeed motivating the taxman.

In fact, “HMRC is keen to reverse the original decision to prevent people following the precedent set by Lineker,” said Hoye.  

“The case against Gary Lineker has proven to be a costly dispute for HMRC,” he added. "[The Revenue] will be keen to reverse this decision to prevent…the use of partnerships to circumvent IR35”.

'Inside or outside IR35'

But the tax dispute manager said he believes that unfortunately for the tax office, “the appeal is unlikely to be successful.”

Even if HMRC does succeed, WTT’s Wallace has never actually seen a general partnership used as an intermediary for personal service, due to tax efficiency reasons.

Moreover, an HMRC victory over Gary Lineker Media at a TBC date won’t actually decide whether the 62-year-old broadcaster was "inside or outside IR35" for the relevant engagements, the ex-inspector cautioned.

“If the UT decides that IR35 can apply, then the case will need to be remitted back to the First Tier Tribunal,” Mr Wallace said.

“[The FTT would then need] to hear evidence and fact-find around the hypothetical contract between himself [- Mr Lineker] and the BBC and BT Sport.”

'HMRC must think they've got a case against Lineker'

Wallace also emphasised the nicheness of the case, saying the UT is only going to look at whether IR35 can apply in Linker’s “specific circumstances”.

“No date is yet set for the appeal to be heard,” the WTT Group director said, pointing to the UT’s June 22nd update.

“[So] as you might [be able to] tell…, we are some way off resolving this one.”

It is also far too early to write off HMRC’s chances of winning, according to a tax lawyer, even if the dispute might eventually end up at the Supreme Court.

“Partnerships are covered by IR35 but, only under certain conditions. That said, HMRC must think they’ve got a case otherwise they wouldn’t have pursued it,” the lawyer, Rebecca Seeley Harris of ReLegal Consulting told ContractorUK.

'Action against partnerships'

Yet Hoye isn’t so sure. “It is difficult to see the Upper Tribunal overturning the ruling of the First Tier Tribunal…as the basis of an appeal to the UT must be made on a point of law, without reopening the entire case,” he says.

In a statement, the Haysmacintyre manager added: “However, with HMRC keen to reinforce its statement following the FTT decision that ‘everyone should pay the correct amount of tax regardless of their wealth or status,’ this could be the sign of further significant appeals and [HMRC] action [against partnerships] on the horizon.”