HMRC appeals Lineker decision

Published: 21st August 2023

Perhaps unsurprisingly, following HMRC’s loss at the First-tier Tribunal (FTT), it isn’t giving up on its dispute with Gary Lineker (L). It has appealed against the decision made by the First-tier Tribunal in favour of Gary Lineker. The outcome of this case is important for any person considering providing their services through an intermediary where IR35 is in question. The tax involved is around £3.5 million but that’s the tip of the iceberg. Also at stake are fundamental issues regarding the efficacy of the IR35 rules. HMRC’s appeal to the Upper Tribunal was inevitable given that it stands to win even if it loses.

The crux of the dispute is whether the contract for L’s work was between himself alone or on behalf of the partnership with his former wife. If HMRC wins and there’s no appeal from L, it gets the money and may also confirm that the IR35 rules work as intended. Whereas, if it loses it has a case to demand the lost tax from the BBC and BT Sport (although time limits may prevent this) who agree the contracts with L. In case of a loss it’s also likely that the government will act quickly to rewrite the IR35 rules to prevent the loophole uncovered in the FTT. This case is important for both sides and it might yet go to a penalty shoot-out in the Court of Appeal or even the Supreme Court.