Barnes provided his services to Sky between 2013 and 2019 through his company S&L Barnes Limited.
The tribunal was held back in July to determine whether legislation - known as IR35 - applied to Barnes for the punditry services he provided Sky during that time.
IR35 legislation was designed to tax 'disguised' employment at a rate similar to employment, and has had varied success across tribunal cases.
The judgement of the July tribunal, published yesterday (January 19), ruled that IR35 did not apply to Barnes, meaning the Sky Sports pundit will not have to pay the almost £700,000 tax bill to HMRC.
Barnes' appeal was granted on the basis that he was in ‘business on his own account’.
This win could prove crucial in making it crystal clear to firms that forcing all contractors onto the payroll is unnecessary, not to mention expensive.Seb Maley, Qdos
Between 2013 and 2019, Barnes' income from Sky made up anywhere between 33 and 61 per cent of the income flowing to his business, S&L Barnes Limited.
"The most compelling indicator is that the appellant’s [Barnes] contract with Sky was but one part of the brand, and contributed on average 60 per cent of the appellant’s income, while over £150,000 on average would also be earned from other clients," the tribunal read.
"Sky knew Barnes was in business on his own account and worked for other broadcasters. Sky welcomed that fact and wanted the world’s best commentator for the coverage.
"The second compelling indicator is the degree of autonomy Mr Barnes had in relation to how he fulfilled his role as a commentator for Sky Sports coverage."
FTAdviser understands HMRC has won more than 80 per cent of employment status and off payroll appeals heard by the tribunals and the courts since the start of 2020.
Fellow former professional rugby player, Michael Lynagh, had his application for an appeal rejected last month, leaving him with a £230,000 tax bill for breaching IR35 rules.
Earlier in the year, Sky Sports presenter Alan Parry also lost his appeal against HMRC, leaving him with a £356,000 tax bill.
Talksport host Paul Hawksbee lost his appeal last year too, seeing HMRC pick up an additional £140,000 IR35 tax liability bill.
But last year did see Radio 5 Live presenter Adrian Chiles win a seven-year long tax liability case to the tune of £1.7mn against HMRC.
In the government's "mini" Budget last September, it was announced that IR35 reform would be repealed from April 6, 2023.