HMRC Settles IR35 Tax Case with Gary Lineker

HM Revenue & Customs (HMRC) has confirmed the settlement of its high-profile IR35 tax dispute with former footballer and broadcaster Gary Lineker, bringing an end to a long-running legal battle over a £4.9 million tax liability related to his work with the BBC and BT Sport.

The case, which had initially been ruled in Lineker’s favour by the First-tier Tribunal (FTT), was set to go before an Upper Tribunal after HMRC filed an appeal. However, the appeal has now been withdrawn, and the matter has been resolved through an out-of-court settlement. The exact terms of the settlement remain undisclosed.

Dave Chaplin, CEO of IR35 compliance firm IR35 Shield, explained the complexities of the case, noting that Lineker operated through a general partnership. This arrangement already subjected him to income tax similar to that of a sole trader. Chaplin clarified that Lineker had paid most of his income tax upfront and had also made both employer and employee National Insurance Contributions (NICs) as part of the partnership structure.

The disputed sum, which had been widely reported as £4.9 million, was actually much smaller, according to Chaplin. The true amount in question was between £300,000 and £400,000, spread across several years. This difference represented the marginal gap between employer NICs and those paid by a sole trader.

With this case now closed, Lineker can move on, but the wider issue of IR35 compliance remains unresolved for many others. Chaplin warned that the ongoing tribunal cases related to IR35 are far from over, and the landscape continues to be challenging for individuals and businesses navigating these regulations.

The settlement not only marks the end of a contentious chapter for Lineker but also highlights the ongoing difficulties surrounding IR35 enforcement, which governs how workers are taxed if they operate through intermediaries such as personal service companies. Despite the settlement, the debate over IR35’s application is likely to continue, with further cases expected to shape the future of the legislation.