Gary Lineker wins £4.9mn IR35 case against HMRC

Gary Lineker wins £4.9mn IR35 case against HMRC
Football presenter Gary Lineker has won his IR35 case against HMRC. (Photo by Oli Scarff /AFP via Fotoware).

Gary Lineker has won a tax battle against HM Revenue and Customs after being accused of underpaying nearly £5mn in 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.

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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.

However, in a 17-page ruling from the first-tier tribunal tax chamber, Judge Brooks said because there were direct contracts between the parties, the IR35 rules do not apply, and therefore Lineker was self-employed for tax purposes.

If a worker comes under the IR35 tax rules, they are treated as employees for tax purposes, so should pay the rate of income tax and national insurance contributions as expected by an employee.

Lineker hosts Match of the Day on the BBC, and used to present BT Sport’s Champions League coverage. 

HMRC is considering an appeal, FTAdviser understands.

An HMRC spokesperson said: “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. It is our duty to ensure everyone pays the right tax under the law, regardless of wealth or status.”

Chief executive officer of tax adviser Qdos, Seb Maley, said this would be a massive relief for Lineker, but the issue should not have made it this far.

“Just when we thought IR35 couldn’t get any more complex, this ambiguous, fundamentally flawed legislation surprises everyone," he said.

“The case illustrates everything wrong with HMRC’s approach to IR35 compliance.”

Maley criticised HMRC for their pursuit of individuals “for years”, adding: “This takes a huge toll, not just financially but emotionally too".

Previous cases

In January this year Sky Sports pundit Stuart Barnes won an IR35 case, with a judge ruling that he was not liable for a £700,000 tax bill, and last year Radio 5 Live presented Adrian Chiles won a seven-year long tax liability case concerning the payment of £1.7mn in tax.

This was preceded by a number of losses, including fellow former professional rugby player, Michael Lynagh, who had his application for an appeal rejected in December last year, leaving him with a £230,000 tax bill for breaching IR35 rules.

Earlier in 2022, Sky Sports presenter Alan Parry also lost his appeal against HMRC, leaving him with a £356,000 tax bill.