HMRC appealing Gary Lineker being ruled outside IR35’s goalposts is no surprise

Despite the reported comments of Gary Lineker’s barrister that to even bring a case under IR35 against the Match of the Day presenter beggared belief (“IR35 has nothing to do with it”), it comes as no surprise to us that HMRC is appealing the FTT’s decision that the Intermediaries legislation cannot apply to this high-profile personality and his tele presenting assignments at the BBC and BT Sport, writes Charlie Hemsworth, tax consultant at Bauer & Cottrell.

Grasping the IR35 rules

The charge against HMRC, from James Rivett KC and others, appears to be that the tax authority is still struggling to understand its own rules, and in this specific case of HMRC V Gary Lineker Media (GLM), whether those rules introduced in 2000 can even apply to begin with.

It’s true that the legal intricacies of general partnerships are complex, not least how they interact with IR35. We do know that IR35 does apply to partnerships, and the First Tier Tribunal found that GLM was indeed a partnership for his engagements at the two broadcasters, which for the purposes of the HMRC scrutiny ran for the five years from 2013.

But Gary Lineker won at the FTT on the basis that he signed his contracts to do the presenting in a personal capacity only, thereby contracting himself directly with the BBC/ BT Sport. Whether he chose this direct-to-client approach specifically to foil any attempt by HMRC to catch him under IR35 we don’t know. Either way, him personally entering into arrangements with the two broadcasters was why the FTT found that IR35 cannot even be a consideration. Confused?! If so, join HMRC’s club!

To those ContractorUK readers unfamiliar with these matters, you should hunker down for what will no doubt be a very long road ahead, with a lot of possible outcomes.

Contractual intentions will be key

At this pre-Upper Tribunal stage however, we can assert that HMRC’s argument will likely focus on how Mr Lineker intended to enter the contract.

Should HMRC succeed, he will be dealing with a full-blown IR35 case. And in the event of an ultimate victory for the taxman (in the shape of an inside IR35 ruling), the Revenue will be able to claim its arguably highest-profile scalp yet under the legislation.  

Even if HMRC doesn’t win, and a bit like the striker many moons ago when he played for England, it will be glad to have options. For example, should HMRC lose at the UT, the tax authority could pursue the BBC and/or BT Sport in an employment status case. Or it could continue chasing the former England international right up to the highest courts.

PSCs, partnerships, and preparing for the long wait

It should be acknowledged that the Gary Lineker ‘IR35 case’ is not really of central interest to the typical PSC contractor. Not yet anyway.

Nonetheless, we are advising professionals who are trading in partnerships to keep a very close watch, as HMRC are clearly keen on setting boundaries in the way such entities enter into their arrangements. 

But as we’re also advising, be prepared for a long wait for any certainty – the UT hearing date is yet to be set and the case had already been hanging over Mr Lineker for six years. Incidentally, the UT hearing date might take longer than usual to fix, as the court system is currently struggling with a backlog of 50,000 FTT cases.

A move to appeal that says more about the taxman than the case itself...

For now though, contractors should take from this HMRC decision to appeal Gary Lineker being found not within IR35’s goalposts that HMRC continues to look flummoxed by its own legislation. HMRC’s decision to appeal also highlights the potential for high-standing professionals to suddenly be flung into the lengthy tax and status battles when HMRC investigations are initiated.

For him personally, it is fortunate that the soccer supremo and mainstream media presenter has the resources to continue his battle against HMRC, but not all contractors will be as fortunate. For them, the importance of having a well-prepared and solid defence from the kick-off couldn’t be clearer.