TaxApr 21 2023

Sky Sports presenter loses IR35 appeal

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Sky Sports presenter loses IR35 appeal
(Pexels/Nataliya Vaitkevich)

A Sky Sports tennis presenter has lost an IR35 tax case against HMRC on a technicality.

Barry Cowan had appealed a previous decision by HMRC that he should be treated as an employee of Sky for tax purposes, relating to work carried out between the 2014 and 2019 tax years.

The appeal was made by a partnership intermediary, Cranham Sports, in which Cowan is a member.

In June 2021, HMRC said after looking at communications between Sky and Cranham Sports, the relationship between Sky and Cowan was one of service, and Cowan should be treated as employed by Sky.

Part of the appeal rested on a claim by Cranham Sports that some of the correspondence from Sky was not shown to them before the decision was made.

HMRC initially sent its decision to Cranham Sports in December 2021, outlining that Cranham Sports and Cowan could take up an offer of an internal review if requested within 30 days.

Although the opposing side replied to the email, alleging HMRC had failed to reply to points outlined in an email at the end of July that summer, HMRC ruled that no request for a review had been made for 30 days.

Cowan’s representatives later argued that the dispute should remain open until HMRC had fully responded to these points.

A request for a review was eventually sent through in February 2022, 60 days from the decision letter, which was refused by HMRC.

The tribunal judge, Amanda Brown KC, said: “The applicant concedes that the delay had no reason other than the representative made a mistake and essentially did not realise or believe, in light of the email of 8 December 2021, that time was running against the applicant. 

“Rather than seek to remediate the position as soon as possible the representative continued to lock horns with what he considered to be the outrageous conduct of HMRC. 

“He did not appeal but continued to make complaint to HMRC,” she said.

Dave Chaplin, chief executive officer of IR35 Shield, said had this case gone to a tribunal the outcome may have been different.

“This highlights the importance, particularly in IR35 cases, why taxpayers should engage with specialist advisors to defend them. 

“Losing a fight on a procedural point, without even stepping into the ring will obviously be very disappointing for Mr Cowan.”

Other cases

At the end of last month, Eamonn Holmes also lost an appeal against HMRC over whether he was directly employed by ITV as a presenter on This Morning.

In the same month, Gary Lineker won his battle over nearly £5mn in what HMRC said was unpaid tax.

The sports presenter, who made 80 appearances for the English football team during his footballing career, was taken to court by the tax authority who said he owed £3,621,735.90 in income tax and £1,313,755.38 in national insurance contributions.

The litigation was in regard to a contract Lineker and his ex-wife Danielle Bux signed with the BBC, which HMRC said tax should have been paid on income earned between June 2013 and June 2016, and a contract between the pair and BT Sport between June 2015 and May 2018.

A worker falls under IR35 if their services are provided to a client through a partnership, which the judge ruled Lineker’s company (known as GLM) was.