IR35
By: Emma Tait-Barber

What contractors should know about Gary Lineker’s £4.9m IR35 case

With the dust having barely settled on the introduction of IR35 reform in the private sector in April, news then broke of Match of the Day presenter, Gary Lineker’s £4.9m IR35 case. To say that it sparked the interest of contractors and the businesses impacted by IR35 is an understatement.

However, to those of you who stay tuned into the world of IR35, news of HMRC pursuing yet another celebrity in an IR35 case that carries huge tax liability won’t have come as too much of a surprise.

In recent years, presenters Eamonn Holmes, Lorraine Kelly, Kaye Adams and several other well-known names have found themselves tangled in IR35 investigations, each of which have involved tens if not hundreds of thousands of pounds. In fact, if Lorraine Kelly hadn't successfully appealed her case, she would have been left to foot an estimated £1.2m tax bill.

However, ex-England football striker Gary Lineker’s investigation arguably trumps the lot. In this article, we run through everything contractors need to know about one of the most high profile cases in the IR35 legislation’s 21 year history.

What’s the latest?

HMRC thinks Gary Lineker should have been working inside IR35 when presenting Match of the Day between 2013 and 2017, and UEFA Champions League football on BT Sport from 2015 to 2018.

As a result, they handed the former England striker a monstrous tax bill last year, totalling more than £4.9m. This is made up of £3,621,735.90 of Income Tax and £1,307,160.46 of National Insurance Contributions.

However, because Lineker’s company is a partnership and not a personal service company (PSC), the pundit will have already paid a significant amount of this bill. This means the tax paid will be offset against the £4.9m, leaving him with less than £1m to pay should he lose his appeal.

Lineker is adamant that he operated as a genuine freelancer through Gary Lineker Media, the
partnership he formed with ex-wife Danielle Bux in 2012, and requested to amend its grounds of appeal on 16th March 2020. However, due to Coronavirus restrictions, the case is still ongoing.

Commenting on the case, the star’s agent, Jon Holmes, told The Telegraph that Lineker “has paid all personal tax. The amount [owed] is notional and disputed. Gary remains a self-employed contractor for several organisations.”

Why is HMRC investigating Lineker?

As is often the case with IR35, HMRC is likely to have looked at a number of factors before launching an investigation. But while the details of Lineker’s engagements haven’t yet been revealed, it has been reported that the host was contracted to deliver a certain number of Match of the Day programmes, along with other presenting work for the BBC.

This suggests HMRC is of the view that Mutuality of Obligation (MOO) may exist, as it does between an employee and an employer. However, to be clear, this is speculative and HMRC’s argument will become clear when further information is published in due course.

So is Gary Lineker a genuine freelancer?

We will have to see how the appeal plays out.

On the face of it, you would assume that Gary Lineker is a true freelancer. He holds multiple clients simultaneously and isn’t controlled by the BBC in the way that an employee is - a point made in a recent Guardian article, that referenced Lineker’s Tweets and social media activity, which suggests he isn’t bound by the same rules as BBC employees.

However, this is the danger with IR35, which is a complex and ambiguous legislation. While some aspects of a contract might reflect self-employment, other more decisive factors may point towards an employment contract, meaning the engagement belongs inside IR35.

Of course, everything - from Control to Personal Service and MOO - will be pored over throughout the appeal, both by Lineker’s team and HMRC. This includes the contractual terms and the working practices, the latter of which typically reflect how the service was delivered in reality.

Is there anything else to bear in mind?

While HMRC is investigating a contractor (Gary Lineker) in this scenario, following the roll out of IR35 reform, medium and large businesses (along with public sector organisations) will be the focus of the investigation.

This means unless a contractor is engaged by a small company (which isn’t impacted by the reform), they will not be liable for working under the wrong IR35 status. Instead, the fee-paying party will shoulder the risk, assuming all legal obligations have been met throughout the supply chain.

For more information about IR35 reforms, and how they could impact your future assignments, download our comprehensive guide.





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