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31 March 2023

Gary Lineker wins IR35 rule tax appeal against HRMC

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Gary Linker wins the battle against HMRC over £4.9m tax bill. The former England striker’s case was heard in a first-tier tax tribunal in relation to demands from HMRC linked to IR35 rule.


The judge concludes that the Match of the Day presenter was wrongly accused of underpaying £4.9m in tax.

The IR35 rule came into force throughout the UK in April 2000. It aims to close the loophole in the tax system. The legislation targets workers whom could pay less tax by setting up a limited company (or partnership), than they would if employed. So people who work in a similar way to employees but charge for their services via their limited companies to make their business as tax efficient as possible.

HMRC believed off-payroll IR35 tax rules applied to Lineker. He had a direct contract with both the BBC and BT Sport and operated through a partnership. HMRC therefore came to the conclusion that he should have been an employee instead of a freelancer in contracts with the BBC and BT Sport.

A worker falls under IR35 if their services are provided to a client through a partnership. The judge ruled the contracts in question were held between Lineker and his clients directly. Lineker’s company known as Gary Lineker Media (GLM) was set up with his ex-wife Danielle Bux. But Lineker acted as the principal and signed the contracts directly with his clients


Basis of Decision

According to a 17-page ruling, judge Brooks said “The effect of my conclusions is that because there were direct contracts, between the BBC and Mr Lineker and BT Sport and Mr Lineker, the intermediaries legislation (IR35) does not, and cannot as a matter of law, apply.”

Based on IR35 rules, if a worker comes under the IR35 tax rules, they are treated as an employee. Therefore, should pay the rates of income tax and national insurance contributions as expected by an employee.

According to Seb Maley, the CEO of Qdos, an insurer that represents the self-employed,“the decision hinged on Lineker signing the contract himself, as both the worker and a principal of his partnership. If his partner, Danielle Bux, had signed, IR35 could have come into the equation.”

However, the FTAdvisor reported HMRC is considering an appeal.

More on IR35: CEST Assured outside IR35 contractor pursued by HMRC

IR35 rules continue to be a matter of contention for freelancers and contractors. It is therefore important to ensure that contractors understand the IR35 rules, how it applies to them and remain compliant.