Football has been in HMRC’s firing line in recent years, in response to a prompt from politicians over the years. This started with the chase against foreign legions over allegations that their use of image right companies, meant they may not have been paying as much tax as they should.

More recently, HMRC has decided to go in aggressively against ex-Spurs, Leicester, and former England captain Gary Lineker. Gary Lineker remains ever-present in the football world. As a presenter of BBC’s Match of the Day, and in conjunction with the anchor role of BT Sport’s Champions League coverage.

HMRC are pursuing him on the basis that he should have paid £4.9m in tax (£3.62m in Income Tax and £1.3m in National Insurance) for work completed between 2013 and 2017 for the BBC and 2015 to 2018 for BT sport.

Their rationale is Lineker was engaged through a partnership, Gary Lineker Media. Which he set up in 2012 with his then wife Danielle Bux.

HMRC alleges that payments into the partnership should be classed as his employed income and taxed accordingly. Lineker was in effect a direct employee of the BBC and BT Sport. This has come at quite a timely manner, as changes to the private sector rules on IR35 only came into force last month. This was delay due to Covid. The rules are intended to ensure two people providing the same work for the same employer are taxed in the same way. They tackle non-compliance with off-payroll working arrangements.

HMRC have had similar challenges in the past with other high-profile individuals such as Lorraine Kelly and Kaye Adams from ‘Loose Women’. Both cases hinged on determining whether someone is a deemed employee under the IR35 rules, and more specifically the control element.

If a business dictates where someone works, when and on which projects, they may be considered to ‘control‘ that individual and regard them as an employee.

Lorraine Kelly’s lawyer won her case on the basis that her role, is likened to being an actor in a West End show. Wearing a costume chosen for them and following a script. Which they may not have had a hand in writing, which successfully reinforced her point that she held the control.

Gary Lineker may put forward the same argument, but may even rely on his profile, insight and marketability which could potentially make him appear as a brand himself. Lineker has been engaged by BBC and BT Sport, because he offers added value to the programmes that he presents which they would struggle to replicate elsewhere or internally.

This is an important case for HMRC as another defeat in the instance of trying to capture someone high-profile under the rules of IR35 will pose significant questions about the efficacy of the Revenue’s entire approach in a public manner.

If you have any queries regarding the IR35 rules, please do not hesitate to contact us at Signature Tax for advice and insight.

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