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IR35: Gary Lineker cries foul over £4.9m tax bill

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In the most high profile case in the history of the IR35 legislation, former footballer and sports broadcaster Gary Lineker has been pursued by HMRC over £4.9m in unpaid income tax and NIC.

6th May 2021
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Gary Lineker, best known for hosting BBC’s Match of the Day and BT Sport’s UEFA Champions League coverage, is the latest high profile name to appeal HMRC’s IR35 ruling. 

Linker was given the go ahead by the first tier tribunal on 14 April to appeal the IR35 decision, after the case had been outstanding since 23 March 2020 due to administrative delays and coronavirus restrictions. 

Lineker and his former wife Danielle Bux, trading as Gary Lineker Media (GLM), contends that IR35 is not applicable to their partnership and is owed income tax and national insurance contributions (NICs) amounting to £3,621,735.90 and £1,307,160.46 respectively.

Lineker and Bux set up their personal service company in 2012. Through GLM he was contracted to provide his services to the BBC to present Match of the Day during the tax years 2013-14 to 2016-17. GLM also provided his services to BT Sport to front their UEFA Champions League matches during the tax years s 2015-16 to 2017-18.

However the former striker known for never receiving a yellow or red card during his 16-year career was found in breach of HMRC’s IR35 rules after it deemed the arrangements fell within the intermediaries legislation.  

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Replies (32)

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By JCresswellTax
07th May 2021 09:51

Don't understand why the article refers to a personal service company but then keeps mentioning a partnership?

Am I missing something or is this just a non-tax person writing a tax article?

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Replying to JCresswellTax:
By JCresswellTax
07th May 2021 10:03

JCresswellTax wrote:

Don't understand why the article refers to a personal service company but then keeps mentioning a partnership?

Am I missing something or is this just a non-tax person writing a tax article?

Ha! I note the article has now been updated to change 'personal service company' to 'partnership'! Thanks for doing that on the fly and making my first post look daft!

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Replying to JCresswellTax:
John Stokdyk, AccountingWEB head of insight
By John Stokdyk
10th May 2021 10:27

Thanks for pointing that out - you are indeed right about how the discrepancy arose. As we suspected, the article attracted a lot of interest and we felt the need to publish it asap. Our tax editor spotted the PSC/partnership confusion and stepped in to correct it.

As it happens, the interaction of IR35 and partnerships is prompting quite a lively debate not just on the thread here, but in our Monday news meeting. Expect a follow-up article before too long - and thanks to all the contributors who have weighed in on that issue.

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By Duggimon
07th May 2021 09:58

I thought IR35 specifically applied only to companies? Gary Lineker Media is not a company.

edit: I stand corrected having actually looked it up, though I've never heard of a partnership being pursued under IR35 before.

Presumably the tax gap must be proportionally less than in cases relating to a limited company though?

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Tim Good profile image
By Tim Good
07th May 2021 09:51

This case is the first I have come across where HMRC are arguing that a partnership (rather than a limited company) was an intermediary under the IR35 legislation. It demonstrates how a sole trader who joins a partnership (here the sole trader admits his wife as partner) brings themselves within the scope of IR35. The IR35 legislation has always included partnerships as intermediaries but some contractors may have mistakenly thought that if they didn't operate through a limited company they were outwith the scope of IR35.

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By AndyC555
07th May 2021 10:14

I'm generally opposed to HMRC squeezing extra tax out of people but I find Gary Lineker irritating.

Is there any way both sides could lose?

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By johnjenkins
07th May 2021 10:41

I have said this many times and will go on saying it until the self-employed get it. You have a "contract for services" that explains what the working relationship is and then you stick to it.
I like it when the Tribunal "construct a hypathetical contract". Pathetic being the order of the day.

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Replying to johnjenkins:
By Nick Graves
07th May 2021 11:51

johnjenkins wrote:

I have said this many times and will go on saying it until the self-employed get it. You have a "contract for services" that explains what the working relationship is and then you stick to it.
I like it when the Tribunal "construct a hypathetical contract". Pathetic being the order of the day.

I've just constructed an hypothetical contract for all the self-assessment work I've done, which used to be done by HMRC themselves. Do you think they'll pay it...

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Replying to Nick Graves:
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By johnjenkins
07th May 2021 12:07

Don't you mean hypothetical invoice. HMRC would have to sign the contract for it to become invoiceable.

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Replying to johnjenkins:
By Duggimon
10th May 2021 08:38

They've hypothetically signed it.

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By Mallock
07th May 2021 10:55

I think those in HMRC pursuing the IR35 bandwagon should be aware of the potential damage it will do to the UK economy. Those few PSC's we dealt with in the public sector all ended up employed by the public sector at much higher salaries (and they got pensions, paid holiday, sick pay etc). Very little net benefit to the public purse with that arrangement although HMRC statistics would have you believing they brought in loads of extra tax and NI.
In the private sector we are seeing people retiring, moving abroad, working only locally or taking employment and working much less. This will lead to a shortage of skills, much less flexibility in the workforce and importantly, little will to put in the extra effort.
Although engagers are supposed to carry out an assessment on all PSC's, all the large companies are just employing a blanket approach and treating everyone as caught by IR35 regardless of circumstances.
I very much doubt the outcome of all this change and disruption will bring in anything like HMRC's forecasts for additional tax and NI. They will however probably publish the headline figures without considering the other areas from which they will receive less tax and NI as a consequence of IR35, due to additional costs for employers, working less and taking early retirement.

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By dstickl
07th May 2021 10:52

Hi Richard,
Please explain your words of:
QUOTE
However, HMRC considers the correct NIC sum GLM actually owes should be £1,313,755.38 - which is £6,5959.80 more than the sum assessed. Judge John Brooks recognised that there is “clearly an issue with regard to quantum”.
ENDQUOTE

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Replying to dstickl:
By Paul D Utherone
07th May 2021 17:40

It's a direct copy from the BAILLI case report

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Replying to Paul D Utherone:
Stepurhan
By stepurhan
12th May 2021 08:33

Including the part where the figures have been mistyped?

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By alltaxedout
07th May 2021 10:56

On the one hand it may be a witch hunt but on the other, HMRC would have to pursue many many contractors earning £50k (say) to make up for one wealthy media star. So it appears to be cost effective targeting to me.

I'd like to know the motivation for the wife being in the partnership. Fair enough if the BBC insisted. However, if he was self employed then the problem would be the BBC's and not his.

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Replying to alltaxedout:
Stuart Walker Yellow Tomato Copy
By winton50
07th May 2021 11:33

alltaxedout wrote:

On the one hand it may be a witch hunt but on the other, HMRC would have to pursue many many contractors earning £50k (say) to make up for one wealthy media star. So it appears to be cost effective targeting to me.

I'd like to know the motivation for the wife being in the partnership. Fair enough if the BBC insisted. However, if he was self employed then the problem would be the BBC's and not his.


I believe that Danielle is also something of a media star in her own right and in areas not related to football.
She's an actress and a model and has been on such dross as hell's kitchen.
So I think (although do not know for certain) that her earnings would have gone into the partnership as a business.
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By RetiredTax
07th May 2021 11:43

Some years ago, I did see a Vet's P/ship questioned, but not challenged, - particular circ's applied, on IR35-- but as said, P/ships have always been within IR35.

Perhaps GL should fund the Boris Jnr nappies bill, - many will agree there is a high score on the Bristol Stool Chart coming from this lot-- he may then have a better chance of winning!!

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Sarah
By sarahjaneuk
07th May 2021 12:00

I am no great fan of Gary Lineker (not that comes into it) and yet it seems clear to me (certainly since 2015) that he was working for multiple "customers", which then does not fall within IR35, given that this is a genuine company customer-supplier relationship. My understanding was that IR35 was set up to prevent the situation where a person "contracts" to a company and their entire or almost of the company's income is derived at regular intervals from this single source, like an employment situation. This is clearly not the case here. Move on HMRC.

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Replying to sarahjaneuk:
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By Hugo Fair
07th May 2021 12:24

You can't (or rather shouldn't) cherry-pick from the various criteria and only select those that suit a particular outcome. For instance, what about 'substitution'? Would the BBC still pay GLM the same fee for Match of the Day if GLM kept sending along various GL mates rather than the expected host?
I'm no defender of HMRC (or indeed of the flap-eared ex-footballer), but it's precisely because the IR35 rules are so complex and open to interpretation that cases like this will continue to go to tribunal.
BTW I have in the past had multiple concurrent employments ... so are you saying that I should have moved them all out of the employment category?

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Replying to sarahjaneuk:
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By johnjenkins
07th May 2021 13:05

You are spot on. That is what IR35 SHOULD be stopping. However HMRC do not like the one man band under any guise not being on PAYE for all their income. Boris take note, once the euphoria of Brexit and vaccinations has worn off, the self-employed could well deliver you a shock at the next GE, even though Labour has nothing to offer.

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Replying to sarahjaneuk:
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By AndyC555
07th May 2021 14:21

"he was working for multiple "customers", which then does not fall within IR35,"

Not so. Each relationship between worker and engager can be looked at separately. It's possible to have multiple contracts, one or more of which could fall under IR35 and the rest not. Just as I could have 5 separate employments, one for each day of the week. Operating through a PSC would not of itself mean those 5 contracts couldn't each fall under IR35.

Certainly having multiple contracts has more of a 'feel' of not being employment but that's just one factor they look at.

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Replying to AndyC555:
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By johnjenkins
07th May 2021 15:08

That's where IR35 totally falls down. In any universe if you work for more than one person you should be able to call yourself self-employed. Perhaps we should start looking at the definition of self-employed instead of each particular contract. The other thing that IR35 does (which must be illegal) is to take away the status of a legal entity purely to raise funds. Come on guys and gals get a watertight "contract for services" and stick to it.

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Replying to johnjenkins:
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By jeremybarker
07th May 2021 20:16

There are many situations where people work for multiple employers as employees - typically doing several part-time jobs. From both an employment law and a tax law viewpoint (which are different) it would make no sense whatsoever for them to be considered as self-employed (or alternatively a worker in employment law).

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Replying to jeremybarker:
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By johnjenkins
10th May 2021 09:31

Totally agree, however wouldn't it be fair and right if you had the choice without HMRC sticking their greedy noses in. By the way what is a "worker"? It's a word made up by the EU so that the self-employed have PAYE rights. Pathetic.

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By bluebaron
07th May 2021 14:58

I find this very ironic, as my sports pundit clients who do far fewer TV appearances than Gary Lineker have been told by the BBC that they are all now BBC employees. At least if Lineker wins, then so too do my clients..!

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By Paul Crowley
09th May 2021 01:10
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Replying to Paul Crowley:
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By Hugo Fair
09th May 2021 12:04

Not sure about the "Voice of Reason" epithet ... he's a bit too much all over the place for that. But very entertaining (and with some good points).

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Replying to Hugo Fair:
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By Paul Crowley
09th May 2021 15:34

He does seem to blame the BBC for demanding staff get Companies, or in this case a partnership to get the BBC off the hook and risk free under the old rules.
Is this a common claim?
State sponsored broadcaster acting against the State tax system? Any different to Jimmy Carr?
Has PM wandered out of a summit to name BBC as encouraging tax avoidance?
Or does PM let HMRC name the terrible tax avoiders? Indeed the right to know would be more apt to the BBC than a single entertainer?
Still consider PM and HMRC cannot be trusted with confidentiality on the tax affairs of individuals.
Recent GDPR breach confirms as much

'Voice of reason'
Would not look at the other outpourings
Let us politely say that it is a bit deliberately provocative as click and like bait.
But he does seem to get a fair number of likes by far exceeding the dislikes.

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Replying to Paul Crowley:
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By Hugo Fair
09th May 2021 17:14

Yes, it's a common claim (and true) that the BBC used to encourage (demand?) that staff get Companies rather than take up employment contracts ... partly because of the reasons you've suggested, but also because that was how several BBC Directors were 'contracted'!
This was one of the quoted examples behind the introduction of the latest IR35 rules, whereby the responsibility can be laid at the door of the 'deemed employer' (such as the BBC) rather than the individual contractor.

As for "State sponsored broadcaster acting against the State tax system" ... that's nothing compared to HMRC acting against its own tax collection objectives.
Did you never hear about HMRC managing to offload several of its old properties to a company that they "didn't realise" was an offshore entity based in a series of tax-havens? There was plenty in P Eye at the time about the Mapeley STEPS contract ... and a light swipe at http://hmrcisshite.blogspot.com/2016/10/hmrc-building-our-future-mapeley... more recently.

As the cliche goes ... you couldn't make it up and hope to be believed!

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Replying to Paul Crowley:
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By johnjenkins
10th May 2021 09:36

It's not just the BBC. I have many clients who cannot work by being self-employed, they have to have Limited Companies. This is to ensure that there is no liability to the work giver. Even some of the "contract for services" pass the buck. This does beg the question should there be strict rules for the work giver and how would they be passed down to the worker? Or should HMRC just do what they should be doing and leave the commercial decisions to the workforce.

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Ivor Windybottom
By Ivor Windybottom
10th May 2021 11:19

I must be being particularly dense this morning, but how has Mr Lineker saved so much Income Tax through use of a partnership?

Surely Income Tax through a partnership will be broadly similar to that through employment, certainly not £3m less?

Probably obvious, but I'm missing something here!

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Replying to Ivor Windybottom:
By JCresswellTax
10th May 2021 11:25

I'd probably go for employers national insurance.

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