Lineker and Another (t/a Gary Lineker Media)
| Jurisdiction | UK Non-devolved |
| Judgment Date | 14 April 2021 |
| Neutral Citation | [2021] UKFTT 101 (TC) |
| Date | 14 April 2021 |
| Court | First Tier Tribunal (Tax Chamber) |
[2021] UKFTT 101 (TC)
Judge John Brooks
Procedure – Application to amend grounds of appeal – Application allowed – Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (SI 2009/273), r. 5(3)(c).
The First-tier Tribunal (FTT) allowed a taxpayer partnership's application to amend its grounds of appeal in an IR35 dispute. The decision included the FTT's conclusion that it should have one combined hearing to consider in principle whether Gary Lineker would have been regarded as an employee of the BBC and/or BT Sport and the quantum of any tax and NIC liabilities.
For several years, Mr Lineker provided his services to the BBC and BT Sport through a partnership, Gary Lineker Media (GLM). HMRC considered that the arrangements fell within the ambit of the intermediaries legislation (IR35) and issued determinations under the Income Tax (Pay As You Earn) Regulations 2003 (SI 2003/2682), reg. 80, in respect of income tax deductible via PAYE, and notices under the Social Security Contributions Act 1999, s. 8 in respect of Class 1 National Insurance Contributions (NICs).
GLM appealed against the determinations and notices, contending that IR35 was not applicable because Mr Lineker would not have been regarded as an employee of the BBC and/or BT Sport.
HMRC requested the Tribunal to give a decision in principle only, and then for there to be a further hearing, if required, to resolve any issues with quantum.
In this application, GLM sought permission to amend its grounds of appeal pursuant to the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (SI 2009/273), r. 5(3)(c), because:
- The liability was overcharged in the determinations and notices (the quantum ground).
- An officer had to decide whether a person is or was liable before issuing a notice in respect of NIC (unlike for tax where a determination can be issued if there may be tax payable), but for one year there was a letter saying that the officer had not decided whether the appellant was liable to pay contributions of any particular class as he had insufficient facts (the validity ground).
Applying the principles set out in Su-Ling v Goldman Sachs International [2015] EWHC 759 (Comm) and Denley v R & C Commrs [2017] UKUT 340 to the quantum ground, the FTT concluded that it should determine the quantum and liability issues at the same hearing. However, the FTT rejected GLM's application for directions that HMRC give particulars of their case on quantum, as it was for GLM to adduce evidence to challenge the determinations and notices and not for HMRC to justify them.
In respect of the validity ground, the FTT considered that as the ground raised a succinct and discrete legal issue and the proceedings were at an early stage, GLM should be permitted to add the validity ground to the grounds of appeal.
The FTT accordingly allowed GLM's application to amend its grounds of appeal and made appropriate directions.
HMRC's statement of case had requested that the FTT give a decision in this IR35 case in principle only, and then for there to be a further hearing, if required, to resolve any quantum issues, but the FTT disagreed and decided both issues should be heard together.
Now this case management decision has been made it paves the way for the FTT to hear another high profile IR35 case, with this one involving a potential tax and NIC liability of almost £5m.
[1] This is my decision on the application, dated 16 March 2020, (the “Application”) by the appellants, Gary Lineker and Danielle Bux trading as Gary Lineker Media (“GLM”), to amend their grounds of appeal and for further consequential directions in this matter which, because of administrative delays no doubt exacerbated by the various coronavirus restrictions in place since 23 March 2020, has unfortunately remained outstanding for far too long.
[2] The following summary of the background facts, which is taken from the documents provided particularly the Application, the response to it by HM Revenue and Customs (“HMRC”), dated 3 December 2020, and GLM's reply, dated 27 January 2021, is only to put the Application and my decision in context. Nothing in what I say below should be taken as a finding of fact for the purposes of the substantive appeal
[3] GLM is a partnership, established in 2012, between Gary Lineker and his former wife Danielle Bux. Mr Lineker is now best known for the BBC's Match of the Day programme which he has presented since 1999. In addition, from 2015, he has been the lead presenter for BT Sport's coverage of the UEFA Champions League. During the tax years 2013–14 to 2016–17 (inclusive) Mr Lineker contracted to provide his services to the BBC through GLM. He also provided his services to BT Sport through GLM during the tax years 2015–16 to 2017–18 (inclusive).
[4] HMRC considered that such arrangements fell within the ambit of the intermediaries legislation (generally known as IR35) and issued Determinations under regulation 80 of the Income Tax (Pay As You Earn) Regulations 2003, in respect of income tax deductible via PAYE (the “Determinations”); and Notices under s 8 of the Social Security Contributions Act 1999 (the “Notices”) in respect of Class 1 National Insurance Contributions (“NICs”).
[5] As Judge Harriet Morgan explained, at [3], in Red, White and Green Ltd (Eamonn Holmes) [2020] TC 07603:
… IR35 applies where an individual provides services to a client under arrangements involving a third party, such as a [Personal Service Company], broadly, if the individual would be regarded for income tax purposes as an employee of the client if the services were provided under a contract directly between the client and the individual. In that case, the income received by the third party for the individual's services is treated as employment income.
[6] In determining whether IR35 is applicable, the Tribunal is required to first, construct a hypothetical contract between the end user (here the BBC or BT Sport) and the individual providing the service (Mr Lineker) based on the terms of the contract between the personal service company (GLM) and the end user; and secondly, by reference to the well-established legal principles applied by the courts, determine whether an employment relationship...
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