HMRC to appeal Gary Lineker IR35 case

HMRC will appeal the Gary Lineker IR35 case because it has set a precedent of using partnerships to circumvent IR35 legislation, according to Riocard Hoye, Senior Manager in the tax disputes and resolutions team at haysmacintyre.   

HMRC’s appeal is listed on the Upper Tribunal’s case list, with the appeal being received on 12th June, 2023.    

In March, Lineker won his case against HMRC over a £4.9m tax bill for income he earned from 2013 to 2014 and 2017 to 2018. 

Hoye believes HMRC’s loss in the case will have proved to be costly due to its prominence in the media.  

“The tax body has lost a number of significant cases in recent years and will be keen to reverse this decision to prevent people following suit.”     

According to Seb Maley, CEO of IR35 specialist consultancy firm Qdos, there appears to be a misconception regarding whether IR35 applies to partnerships. 

“It can, but only in certain circumstances. HMRC won’t want to lose a case involving such a high-profile individual either, which in my opinion is another reason why they’ve chosen to appeal.”    

There is no official hearing date at present, with a fixed time to be finalised imminently.   

Will the decision be overturned?    

The case began with the tax authorities told the former England striker that he should have been categorised as an employee of the BBC despite owning his own company where he provides freelance services to the BBC and previously BT Sport.  

Judge John Brooks, who released the case decision on 28th March 2023, said: “The effect of my conclusions is that because there were direct contracts between the BBC and Mr. Lineker and BT Sport and Mr. Lineker, the intermediaries legislation (IR35) does not, and cannot as a matter of law, apply.”  

Maley says: “The original decision was based on a nuanced point with no clear precedent, and, to that end, there is a chance it will be overturned. 

 “If this happens, however, it will not have a direct implication on Lineker’s status itself; the case would likely need to be remitted to a First-Tier hearing for the relevant status tests to be discussed in full.”    

However, Hoye believes it would be difficult for the original ruling to be overturned without reopening the entire case.  

 “With HMRC keen to reinforce its statement following the First Tier Tribunal decision that everyone should pay the correct amount of tax regardless of their wealth or status, this could be the sign of further significant appeals and action on the horizon,” he adds.