HMRC loses IR35 case against Gary Lineker

HMRC were pursuing Gary Lineker for nearly £5 million, which the tax authority believed was due under the IR35 legislation in respect of the relationships between Mr Lineker and both the BBC and BT Sport in respect of his television presenting roles. The perceived liabilities covered work conducted for the tax years 2013-14 to 2017-18 inclusive.

Unlike all other IR35 cases that have come before the First Tier Tribunal, this case was the first that did not involve the individual worker providing their services through their own Limited Company. In this instance Mr Lineker, for the period under review, was in a general partnership with his then-wife Ms Danielle Bux, trading as Gary Lineker Media (GLM).

There were four issues arising in this case that needed to be considered by the Tribunal, these being:

• Whether the IR35 Intermediaries Legislation applied to arrangements involving the supply of an individual’s services to a client through a partnership governed by the Partnership Act 1890 in which the individual is a partner;
• Whether, based on the facts, GLM was a partnership;
• Whether there was a direct contract between the BBC and/or BT Sport and Mr Lineker and Ms Bux (the appellants); and
• Whether the appellants should be estopped from contending there was no valid partnership.

The judge determined that the IR35 legislation can apply to arrangements where an individual supplies their services through a partnership to a client and that, based on the particular facts of this case, GLM was a partnership. Given that it was found that GLM was a general partnership, the issue of estoppel did not arise.

When looking at the issue of direct contracts, the judge concluded that these existed between Mr Lineker and the BBC and Mr Lineker and BT Sport, stating that “As a matter of law, when Mr Lineker signed the 2013 BBC Contract, the 2015 BBC Contract and the BT Sport Contract for the provision of his services, he did so as principal, thereby contracting directly with the BBC and BT Sport”.

On the basis that Mr Lineker’s services were provided under direct contracts with the BBC and BT Sport, the judge determined that the IR35 legislation could not apply. The appeal was therefore allowed, meaning that Mr Lineker was not liable to pay the additional income tax and National Insurance Contributions which HMRC had deemed were due because of their view that IR35 applied.

The findings in this case will not impact hugely on other IR35 cases, as the vast majority will involve services provided through a personal service company.

What is clear is that each IR35 case must be considered on its own merits rather than HMRC’s apparent strategy of taking on high profile cases, seemingly determined to make strong statements to the contracting world regardless of the actual details of the arrangements in place.