Gary Lineker has won his battle against HMRC after a judge concluded that the Match of the Day presenter was wrongly accused of underpaying £4.9m in tax.
The former England striker had appealed to a tribunal in relation to demands from the taxman linked to IR35 legislation, which is designed to clampdown on tax avoidance by so-called disguised employees who charge for their services via limited companies.
Lineker insisted that all taxes were paid on the income via his media firm set up in 2012, with his ex-wife Danielle Bux, and they first launched an appeal in March 2019. A tribunal hearing took place last month.
HMRC argued that Lineker was a disguised employee of both BBC and BT Sport but a judge has no ruled that he was a freelancer who had direct contracts with the broadcasters.
In a 17-page ruling, Judge John Brooks 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.
"Accordingly, and notwithstanding GLM being a partnership, that is the end of the matter and the appeal succeeds."
Following the news Lineker said, via a spokesperson: “I am pleased that the tribunal has confirmed that I have not failed to pay any taxes or national insurance by reason of the IR35 rules.”
However, a HMRC spokesperson has told the Mirror that they may consider appealing the decision. “The tribunal has confirmed the off-payroll rules apply to partnerships, as we have always said. However, we do not agree with its decision that the rules cannot apply in this case and we’re considering an appeal. It is our duty to ensure everyone pays the right tax under the law, regardless of wealth or status.”
Judge Brooks added that "For each tax year, Mr Lineker accounted for income tax and Class 4 NIC on the entirety of the income from his services, less a fixed amount of £30,000, paid to his then-wife, Ms Bux (and on which she paid tax).”
During last month's hearing James Rivett KC, representing Lineker, said that "HMRC were looking, in their old turn of phrase, to see why IR35 should not apply, they wanted it to apply."
He added: "It is perfectly plain from the evidence that HMRC closed their minds to anything on the contrary." Mr Rivett also accused the HMRC of conducting a "business-as-usual, factory plant" approach to investigating Lineker.
HMRC have also targeted other broadcasters including Lorraine Kelly and Kaye Adams, both of whom won their cases on appeal. But Dave Chaplin, chief executive of the tax compliance firm IR35 Shield, said that this case was "unique" because Lineker "operated via a limited liability partnership, rather than via a limited company". Chaplin added: “HMRC now needs to take a long, hard look in the mirror and try and understand how such a bungled investigation occurred. To suggest Lineker was an employee of the BBC is absurd.”
Last month Mr Rivett claimed that HMRC were “looking in the wrong place” and should instead be focusing on the broadcasters. Other BBC presenters, including long-serving radio host Liz Kershaw, have previously laid the blame with the broadcaster.
“HMRC are looking in the wrong place here, if they thought there was a quasi-employment relationship between Mr Lineker and the BBC and BT Sport they should have assessed them,” Mr Rivett told last month's tribunal. “They shouldn’t have used this tortuous machinery to do it which gives rise to all sorts of issues of double taxation.”
