IR35 HMRC lost a case Gary Lineker

HMRC has lost a case worth £4.9 million pounds against the BBC presenter Gary Lineker. So, what is it all about? Watch this video to find out more.

I am a chartered accountant from London and i am going to talk about the latest updates on this case, the battle has not ended yet especially if HMRC decide to challenge the decision and fight on.

Gary Lineker made it to the BBC's highest paid star list last year, he earns about £25k to £30k per week for his work and generates an annual income in excess of £1.3M outside of IR35.

So, what is IR35? IR35 is designed to stop so called disguised employees who would use a limited company to receive their disguised salary instead of being on payroll. It quite a complicated legislation and there is no black and white answer in some cases. However, despite the cost of running a limited company, there is a significant tax advantage if you are able to legally avoid being on payroll.

In this case HMRC argued that Gary Lineker is an employee of BBC and BT sport and that he is using his partnership as a way of avoiding high taxes through payroll.

However, the tribunal found the case to in favour of Gary Lineker because although there is a partnership, a direct contract exists between Gary and his clients, BBC and BT Sport.

Gary also paid income tax and class 4 national insurance on the whole of this amount. So, he is not artifically adjusting his salary to avoid high taxes.

Based on these points, the judge decided that IR35 does not apply in this case and made a decision in favour of Gary Lineker. Now he will wait to see if further action is taken by HMRC and it is possible that another judge come to a completely different conclusion on this case.

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