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Mixed bag for HMRC in significant week for IR35 

HMRC dealt blow in Gary Lineker’s IR35 saga, before emerging with victory in Eamonn Holmes case

HMRC has lost its £4.9m tax case against Gary Lineker, winning its case against Eamonn Holmes just days later. The contrasting rulings have been described by experts as “leaving much uncertainty for self-employed workers” where IR35 is concerned.

Lineker – best known for his work on the BBC’s Match of the Day programme – was placed under IR35 investigation in 2017, for contracts held with the BBC and BT Sport. HMRC believed the former footballer owed £4.9m in taxes. 

However, Judge Brooks found that Lineker held direct contracts with the BBC and BT Sport; there was no intermediary and therefore the intermediaries legislation could not apply. Lineker’s appeal was successful.

Fellow TV presenter Eamonn Holmes was less fortunate, though. Holmes – formerly of ITV’s This Morning – lost his appeal at the Upper Tribunal. He was placed under IR35 investigation in 2018 before a First Tier Tribunal ruled in HMRC’s favour in 2020. His unsuccessful appeal at the Upper Tribunal means that Holmes now faces a reported £250,000 tax bill.

The two cases are the latest to be settled in a long line of IR35 investigations brought against high-profile individuals, including Lorraine Kelly and Adrian Chiles.


Lineker: under the microscope

That Lineker provided his services via a partnership was central to this case. The judge explained that partnerships can be subject to IR35, but the rules did not apply in this instance because “Mr Lineker’s services were provided under direct contracts”.

When Lineker signed the contracts “for the provision of his services, he did so as principal” partner of the partnership and as the worker. “As such, the intermediaries legislation cannot apply”, the judge ruled.

A spokesperson for HMRC, quoted in the FT Advisor, said that the tax office was “considering an appeal”.


Holmes: deep dive

Control was the key element in this Holmes case, with the Upper Tribunal Judge, Jonathan Cannan, finding that ITV held a “sufficient framework of control” over the presenter. This was despite the fact that Holmes worked for several clients.

The extent of ITV’s editorial control was considered a “relevant factor” in determining how much control the end-client held over Holmes, which was indicative of the nature of an employment relationship. 

However, according to comments from Dave Chaplin – CEO of IR35 Shield – summarised in the FT, the appeal faced additional difficulty as new evidence could not be introduced. 

On the result, Chaplin said, “I actually think the overall result for Holmes is wrong”.


“IR35 racket” extorts self-employed

Both cases stand as reminders that HMRC is actively investigating contracts held before the implementation of IR35 reform. And both cases will be a source of confusion for contractors, given that similar circumstances in both led to different results.

Commenting on the result of Lineker’s case, Dave Chaplin said that HMRC’s approach was “absurd” and the investigation “bungled”.

“I hate to think how much money Gary Lineker has had to waste on defending himself, money which no doubt he would have preferred to spend on more charitable causes”.

“HMRC now need to take a long hard look in the mirror and try and understand how such a bungled investigation occurred. To suggest he was an employee of the BBC is absurd”.

Chaplin called the Lineker investigation “another example of a high profile individual” caught in the “sausage-machine-like IR35 racket” that HMRC uses to “extort money from genuine freelancers with the threat of expensive court cases”.

He congratulated Lineker on the result, concluding: “Lineker is well known for standing up to bullies, and once again, he has won. Good for him”.

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