Ex-footballing legend and much-loved BBC pundit Gary Lineker has won his £4.9 million tax appeal against HMRC. In this high-profile IR35 case, a judge ruled that Lineker was a freelancer with direct contracts with BBC and BT Sport, and the intermediaries legislation (IR35) did not apply. Keep reading for more information about this case, including Gary Lineker’s response, the reaction from stakeholders, and an explanation from the judge why HMRC was incorrect in pursuing unpaid tax and National Insurance in this instance.

An overview

The government introduced IR35 legislation in 2000 to tackle “disguised employees” who were operating as directors of a limited company while working just like employees in permanent positions. By operating this way, limited company directors could reduce their tax and National Insurance liabilities, unlike permanent employees, resulting in HMRC taking action.

HMRC had gone after Gary Lineker for £4.9 million in tax and National Insurance they considered he had underpaid on income received between 2013 and 2018. During this period, HMRC claimed that Lineker should have been considered an employee of the BBC and BT Sports – the two companies he conducted presenting duties for. Instead, Lineker was not hired directly as a staff member by either organisation and instead worked as a freelancer. Between 2013 and 2018, Lineker claimed all taxes were paid on the income he received via Gary Lineker Media (GLM) – a partnership he set up with Danielle Bux, his ex-wife, in 2012.

HMRC going after a famous face for unpaid tax and National Insurance under IR35 legislation is not new. In the past, Lorraine Kelly faced a significant tax bill (£1.2 million) but emerged victorious after tribunal. TV Presenter, Eammon Holmes, was unsuccessful when challenging a £250,000 tax bill and branded HMRC as a “department of thievery.”

The judge deemed that “the intermediaries legislation cannot apply”

John Brooks, the tribunal judge, decided that Gary Lineker’s appeal should be granted because there were contracts in place between the presenter and both the BBC and BT Sports. He said:

“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.

As such, the intermediaries legislation cannot apply – it is only applicable ‘where services are provided not under a contract directly between client and the worker’.

In this case Mr Lineker’s services were provided under direct contracts with the BBC and BT Sport.

Although such a conclusion might appear inconsistent with my conclusions that the intermediaries legislation can apply to partnerships… that is not the case.”

HMRC is considering appealing the decision

As stated in an article on Sky News, an HMRC spokesperson has said the government department is considering appealing.

“The tribunal has confirmed the off-payroll rules apply to partnerships, as we have always said.

However, we do not agree with its decision that the rules cannot apply in this case and we’re considering an appeal.”

Dave Chaplin, IR35 expert, expects HMRC to appeal against the First-tier tribunal ruling because HMRC have done so in the previous four cases. Chaplin said:

“I hate to think how much money Gary Lineker has had to waste on defending himself, money which no doubt he would have preferred to spend on more charitable causes.

HMRC now need to take a long hard look in the mirror and try and understand how such a bungled investigation occurred. To suggest he was an employee of the BBC is absurd.

This is just another example of a high profile individual being caught up in the narrowed down sausage machine-like IR35 racket that HMRC has been running for years to try and extort money from genuine freelancers with the threat of expensive court cases, which they cannot afford.

Lineker is well known for standing up to bullies, and once again, he has won. Good for him.”

HMRC’s decision to seek £4.9 million in additional tax and NI left Gary Lineker “flabbergasted”

In a Tweet posted by Gary Lineker on 28th March 2023, he said he was “totally flabbergasted” that HMRC believed he owed additional tax and National Insurance. The Tweet said:

“I had already paid all tax due at the top rate and happily so. I’m still totally flabbergasted as to why I was expected to pay double. Thankfully justice was done.”

Separately, he also thanked those who had shown him support during the process:

“Thanks for all the congratulatory messages. I am pleased that the Tribunal has endorsed my contention that I have not failed to pay any taxes or National Insurance by reason of the IR35 rules.”