Published: 5th April 2023
HMRC has been targeting media personalities with the IR35 rules, with partial success. Two more high profile cases have been heard. Who were the winners and losers?
The IR35 rules kick in where a worker provides their services through an intermediary, usually, but not always a limited company. Significant tax and NI savings can be realised if this structure is successful. However, HMRC often views such engagements as a sham with the worker being an employee in all but name. The IR35 rules apply if, in the absence of the intermediary, the worker would be an employee of the engaging entity. A number of high profile media personalities have had their employment statuses challenged in recent years.
Gary Lineker has presented Match of the Day for the BBC since 1999. He has also undertaken occasional work for BT Sports. His tax affairs came under the spotlight when it was reported that HMRC was pursuing him for a sum in the region of £5 million. The decision of the First-tier Tribunal (FTT) was that the contracts were made directly between Mr Lineker and the engaging partners in his capacity as a partner of a general partnership. He had correctly declared his income as a share of partnership income (less a fixed allocation to his partner). As there was a direct contract, IR35 could not apply to the arrangement.
The news for Eamonn Holmes was less cheering. The Upper Tribunal has upheld the FTT’s decision that his arrangements were inside IR35; largely due to the degree of control the engager (ITV) had over the format and content of the shows Mr Holmes presented.