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IR35Latest NewsFreelance workersPayrollTax

Gary Lineker faces IR35 tax accusation

by Adam McCulloch 7 May 2021
by Adam McCulloch 7 May 2021 Gary Lineker presenting a football match for the BBC
Photo: Alamy
Gary Lineker presenting a football match for the BBC
Photo: Alamy

HM Revenue and Customs has accused football and TV star Gary Lineker of having a £4.9m tax liability and of being a ‘disguised employee’ under IR35.

The tax authority is seeking £3.6m in income tax and £1.3m in national insurance contributions from Lineker for work he performed for the BBC between 2013 and 2017, and for BT Sport during the 2015-16 and 2017-18 tax years.

Tax tribunal documents published in April show Lineker has been in dispute with HMRC for well over a year.

The former Barcelona and Spurs player’s personal service company, Gary Lineker Media, disputes that the work done was effectively that of employment.

On 16 March last year the company had lodged a request to amend its grounds of appeal at the tax tribunal, but the case had remained outstanding because of coronavirus restrictions, the tribunal said.

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IR35 legislation is designed to end the practice of workers billing for their services through limited companies so they can avoid paying income tax and national insurance contributions. Instead they pay lower corporate taxes. The practice is characterised as “disguised employment” by tax authorities.

But Lineker’s agent Jon Holmes argued that the TV presenter was not employed. “It is a question of whether he is employed by the BBC or not,” he said. “Most people, once they understand employment law, would say of course he isn’t. He works for many other people.”

Lineker works for other media groups, including BT Sport, for which he leads coverage of Uefa’s Champions League.

HMRC has launched several cases against high-profile broadcast presenters in recent years, including Kaye Adams, Lorraine Kelly and Eamonn Holmes. Adams and Kelly won their tax cases at tribunal, but Holmes lost and is appealing

Seb Maley, CEO at IR35 specialist Qdos, suggested that Lineker’s arrangement may have been proposed by the BBC itself. He 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.

“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.”

Maley was sceptical over HMRC’s case: “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, called the HMRC pursuit of Lineker “a misguided attempt to shore up the Treasury’s coffers”.

He added: “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 employer’s 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 employer’s 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.”

Chaplin pointed out that although the tax figures in these rulings were “headline-grabbing”, it was actually the case that those figures were largely inflated compared with what was actually owed, because the amounts of tax already paid need to be offset, which in average cases was at least a third of the original sum.

He said: “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 with employment. HMRC should be thanking freelancers for their contributions, not victimising them as tax avoiders using this cruel legislation.”

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Lineker is the BBC’s highest-paid star, earning about £1.75 million in the 2019-20 financial year. However, he has agreed a new five-year contract with the corporation, which will reduce his pay by 23%.

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Adam McCulloch

Adam McCulloch first worked for Personnel Today magazine in the early 1990s as a sub editor. He rejoined Personnel Today as a writer in 2017, covering all aspects of HR but with a special interest in diversity, social mobility and industrial relations. He has ventured beyond the HR realm to work as a freelance writer and production editor in sectors including travel (The Guardian), aviation (Flight International), agriculture (Farmers' Weekly), music (Jazzwise), theatre (The Stage) and social work (Community Care). He is also the author of KentWalksNearLondon. Adam first became interested in industrial relations after witnessing an exchange between Arthur Scargill and National Coal Board chairman Ian McGregor in 1984, while working as a temp in facilities at the NCB, carrying extra chairs into a conference room!

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