Champions League presenter Gary Lineker is being pursued by HMRC in what has been dubbed a “witch hunt” over a tax bill of £4.9million.
According to the Daily Mail, the former England star has been channelling his earnings as a freelancer presenting various shows at BT Sport and BBC such as Match Of The Day through a company partnership he created in 2012.
While this type of business is legal, HM Revenue and Customs (HMRC) has been knuckling down on TV and radio stars who have used this approach to manage their tax affairs.
Dave Chaplin, CEO of ContractorCalculator, shared that HMRC has continued “to carry out a witch hunt on high profile media stars” such as Lineker. However, he pointed out that HMRC has failed 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 to employment”.
He added: “HMRC should be thanking freelancers for their contributions, not victimising them as tax avoiders using this cruel legislation.”
Seb Maley, CEO of Qdos, also weighed in on the news, highlighting that this is one of the most high-profile cases in the history of the IR35 legislation. He pointed out that based on other stars who have been targeted by HMRC, it may be likely that Lineker is found to be “genuinely self-employed and HMRC have got things wrong yet again”.
Maley continued: “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.”
Risks of non-compliance
Whether or not Lineker is found to be self-employed, this case highlights the potential risks of non-compliance, not just to freelancers and contractors, but the businesses that engage them, Maley warned.
With this in mind, it’s crucial that employers and HR teams are equipped with the right knowledge concerning IR35, as medium and large businesses are now liable for mistakes made when it comes to IR35 following the off-payroll reform.
“Should HMRC find that an incorrect IR35 status decision has been made, the fee-paying party – which is either the end-client or the agency – will owe tax, interest and possibly even penalties in due course,” Maley told HR Grapevine. “The vast sums in the Lineker case show just how important it is that businesses make well-informed and compliant IR35 decisions.”
To avoid this, Maley advised that organisations can ensure compliance is met by prioritising fair and rigorous IR35 assessments.
He added: “Blanket decisions – where contractors are all placed inside IR35 irrespective of their true status – are non-compliant. Ideally, businesses should be making case-by-case decisions following an expert IR35 status review carried out by an objective and independent party with no financial gain in the outcome of the assessment.”
Other high-profile cases
HMRC has previously set its sights on various high-profile stars, including the likes of ITV star Lorraine Kelly, Loose Women presenter Kaye Adams and talkSPORT presenter Paul Hawksbee.
While HMRC lost cases against each of these stars, journalist Eamonn Holmes was not so successful.
In 2020, despite claiming he was a freelancer and received payments via his company, the former This Morning host lost his case against the taxman and was hit with a £250,000 bill.
Image credit: BBC/Mindhouse Productions
