Tax  

Sky Sports presenter loses £350k IR35 appeal

Sky Sports presenter loses £350k IR35 appeal
Simon Bellis/Bloomberg

Sky Sports presenter Alan Parry has lost his appeal against HM Revenue and Customs leaving him with a £356,000 tax bill.

Parry had contested that contracts held by his limited company, Alan Parry Productions Limited, with Sky between the tax years 2013/14 and 2018/19 reflected an employed, rather than self-employed, relationship.

The law up for debate was IR35, which is designed to tax 'disguised' employment at a rate similar to employment.

HMRC said Parry owed £222,474 in income tax and £133,945 in national insurance contributions, totalling £356,419.

At a first-tier tax tribunal hearing at the end of May, Judge Tony Beare heard the case. A judgment on June 16 followed, which found “the overall impression is that the relationship between BSkyB [British Sky Broadcasting] and Mr Parry was one of employment”.

Beare said: “Mr Parry was not carrying on business on his own account when he provided services for BSkyB. Instead, he was providing his services under contracts of service.”

Parry can submit another appeal and, if accepted, the hearing could be reviewed at an upper tribunal by a different judge.

“The sums alone in this case highlight the staggering cost of getting IR35 wrong,” said chief executive of tax consultancy Qdos, Seb Maley.

Last year, former Sky Sports TV presenter Dave Clark lost his IR35 appeal against HMRC, which saw him handed a £281,000 tax bill.

TV sports host Gary Lineker's £4.9mn tax battle continues, while broadcaster Lorraine Kelly won her case over a £1.2mn bill. As did Radio 5 Live presenter Adrian Chiles, who was facing a £1.7mn bill. 

“Whichever way you look at it, the £356,000 tax bill handed to Parry is a firm reminder of the importance of IR35 compliance – something that contractors and businesses must prioritise,” said Maley.

“Digging into the details, it seems that the contracts held between Parry and Sky didn’t necessarily reflect the reality of the engagement, which HMRC will likely pay close attention to in the event of an IR35 investigation.”

In April 2021, a change in responsibility in the way IR35 applied meant the emphasis moved from worker to party engaging worker. Tax years following this date will see medium and large companies bear the brunt of liability for IR35.

An HMRC spokesperson said: “We welcome this judgment, which confirms our view that the off-payroll working rules applied. These rules are in place to create a level playing field for all workers by ensuring that people who work like employees, but through their own limited company, pay the same amount of tax as an employee would.”

 ruby.hinchliffe@ft.com