IR35 specialist, Qdos, have responded to the news that Match of the Day host, Gary Lineker, is being pursued by HMRC in a First Tier Tax Tribunal carrying a potential £4.9m in tax liability.
HMRC have taken the view that Lineker should have been operating ‘inside IR35’ on contracts held at the BBC (2013 – 2017) and at BT Sport (2015 – 2018). He is appealing.
Qdos CEO, Seb Maley said, “This is the most high profile case in the history of the IR35 legislation. It might also carry the most tax liability – a staggering £4.9m. But it’s not the first time HMRC have pursued a well known TV presenter, and I doubt it will be the last.
“The irony is that Gary Lineker may have been told by the BBC to work through a limited company. It might not have been his choice, as was the case with several other BBC freelancers who HMRC have targeted in recent years.
“HMRC’s understanding of the IR35 rules and their track record in tribunals leaves a lot to be desired. So I wouldn’t be too surprised if it’s found that Lineker is genuinely self-employed and HMRC have got things wrong yet again.
“This case also highlights the potential risks of non compliance – not just to freelancers and contractors, but also to businesses that engage them. It’s vital that well informed IR35 status decisions are made from the outset.”
Dave Chaplin, CEO of ContractorCalculator added, “Once again, we are seeing a high-profile celebrity being targeted by HMRC in a misguided attempt to shore up the Treasury’s coffers. The Intermediaries Legislation, commonly called IR35, was created in April 2000 by HMRC to crackdown on the ideological invention by HMRC of ‘deemed employees’.
“The fact is that high paid freelancers like Gary Lineker now pay more tax by operating via a limited company than an employee on the same salary.
“The tax efficiency by hiring someone self-employed is actually obtained by the firm that hires them, in this case the BBC, who would have avoided having to pay Employers National Insurance of 13.8% on top of whatever monies were paid to Mr Lineker. To suggest that he has avoided tax is pointing the finger in entirely the wrong direction.
“HMRC changed the rules for IR35 in the public sector from April 2017, and now if an individual is found to be a ‘deemed employee’ the Employers National Insurance is paid by the firm hiring the contractor. If Gary Lineker’s situation was under the IR35 microscope under the new rules then the BBC would have a tax bill to pay.
“Whilst the tax figures in these rulings can be considered headline grabbing, one has to consider that those figures are largely inflated compared to what is actually owed, because the amounts of tax already paid need to be offset, which in average cases is at least a third of the original sum.
“I sincerely hope that Gary Lineker wins his case. HMRC continues to carry out a witch hunt on high profile media stars and fails to grasp the simple concept that there is a freelance premium, and because of this, freelancers end up generating more in tax by operating this way compared to employment. HMRC should be thanking freelancers for their contributions, not victimising them as tax avoiders using this cruel legislation.”