The latest and perhaps most high-profile IR35 case is currently being fought by Gary Lineker against HMRC claims that he owes £4.9million in unpaid tax. Dave Chaplin, CEO of ContractorCalculator described the move as a “misguided attempt” by HMRC to “shore up the Treasury’s coffers”.
“This is the most high profile case in the history of the IR35 legislation,” Agrees Qdos CEO, Seb Maley, “it might also carry the most tax liability – a staggering £4.9m. But it’s not the first time HMRC have pursued a well known TV presenter, and I doubt it will be the last.”
Outlining the issues, Chaplin says: “The fact is that high paid freelancers like Gary Lineker now pay more tax by operating via a limited company than an employee on the same salary. The tax efficiency by hiring someone self-employed is actually obtained by the firm that hires them, in this case the BBC, who would have avoided having to pay Employers National Insurance of 13.8% on top of whatever monies were paid to Mr Lineker. To suggest that he has avoided tax is pointing the finger in entirely the wrong direction.
“HMRC changed the rules for IR35 in the public sector from April 2017, and now if an individual is found to be a ‘deemed employee’ the Employers National Insurance is paid by the firm hiring the contractor,” he adds. “If Gary Lineker’s situation was under the IR35 microscope under the new rules then the BBC would have a tax bill to pay.”
“The irony is that Gary Lineker may have been told by the BBC to work through a limited company,” notes Seb Malloy. “It might not have been his choice, as was the case with several other BBC freelancers who HMRC have targeted in recent years.
“HMRC’s understanding of the IR35 rules and their track record in tribunals leaves a lot to be desired,” he continues, “so I wouldn’t be too surprised if it’s found that Lineker is genuinely self-employed and HMRC have got things wrong yet again.”