| Lineker VS HMRC over £5mill tax bill 09:09 - May 7 with 1453 views | Keno |
https://www.ft.com/content/20bc9609-5f9e-448a-8882-1c31fc6e41cd
I didn't get paywall so have copied and pasted article
Emma Agyemang and Murad Ahmed YESTERDAY
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TV sports star Gary Lineker is embroiled in a £4.9m battle with the UK tax authority, which has accused him of being a “disguised employee”.
Tax tribunal documents published last month reveal the Match of the Day presenter and former England footballer has been in dispute with HM Revenue & Customs for well over a year.
HMRC is seeking £3,621,735.90 in income tax and £1,313,755.38 in national insurance contributions from Lineker for work he performed for the BBC between the 2013/14 and 2016/17 tax years and for BT Sport during the 2015/16 and 2017/18 tax years inclusive.
Lineker’s personal service partnership, Gary Lineker Media, which was established with his former wife Danielle Bux, disputes that the work done was effectively that of employment.
The company lodged a request to amend its grounds of appeal at the tax tribunal on March 16 2020 but the case had remained outstanding because of coronavirus restrictions, the tribunal said.
Legislation known as IR35 is designed to crack down on tax avoidance by so-called disguised employees. These workers bill for their services via limited companies and avoid paying income tax and national insurance contributions, despite effectively being employees. Instead they pay corporate taxes, which are typically lower.
“It is a question of whether he is employed by the BBC or not,” said Jon Holmes, Lineker’s agent. “Most people, once they understand employment law, would say of course he isn’t. He works for many other people.”
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The presenter is the BBC’s highest-paid star, earning £1.75m in the 2019/2020 financial year. However, he has also agreed a new five-year contract with the corporation, which will reduce his pay by 23 per cent. During the pandemic, he donated two months’ pay to the Red Cross after calling on footballers to donate money to the NHS.
But Lineker also works for other media groups, including leading BT Sport’s coverage of Europe’s Champions League football tournament.
HMRC has launched several cases against high-profile broadcast presenters in recent years, including Lorraine Kelly, Kaye Adams and Eamonn Holmes. The former two won their tax cases at tribunal, but Holmes lost. He is appealing.
Dave Chaplin, chief executive of the ContractorCalculator advice website and a campaigner against recent IR35 reforms, accused HMRC of targeting high-profile celebrities “in a misguided attempt to shore up the Treasury’s coffers”.
“HMRC continues to carry out a witch hunt on high-profile media stars and fails to grasp the simple concept that there is a freelance premium, and because of this, freelancers end up generating more in tax,” he said. “HMRC should be thanking freelancers for their contributions, not victimising them as tax avoiders using this cruel legislation.”
The tax authority said it did not comment on “identifiable taxpayers or ongoing legal proceedings”. But it added: “HMRC has recently won a number of important cases, including at the Upper Tribunal, which set a useful precedent and give welcome clarity to taxpayers and HMRC alike.”
[Post edited 7 May 2021 9:11]
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| Lineker VS HMRC over £5mill tax bill on 10:36 - May 7 with 1238 views | Keaneish |
IR35 is a joke. At a time when Limited Companies are on their knees, this legislation is a nail in the coffin for a lot of people forcing them into permanent employment. In my opinion, it’s such a short sighted initiative which does nothing for the individual, severely hampers certain sectors and their ability to recruit talent and puts more money in the hands of unnecessary middle men like Umbrella companies who layer on hidden costs to cover their own NI contributions - this is the real crime. |  |
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| Lineker VS HMRC over £5mill tax bill on 10:46 - May 7 with 1192 views | StokieBlue |
| Lineker VS HMRC over £5mill tax bill on 10:36 - May 7 by Keaneish |
IR35 is a joke. At a time when Limited Companies are on their knees, this legislation is a nail in the coffin for a lot of people forcing them into permanent employment. In my opinion, it’s such a short sighted initiative which does nothing for the individual, severely hampers certain sectors and their ability to recruit talent and puts more money in the hands of unnecessary middle men like Umbrella companies who layer on hidden costs to cover their own NI contributions - this is the real crime. |
The legislation was put in place a long time before the current situation though so to link it to limited companies not doing well at the moment isn't really fair.
Given tax changes over the last few years, if someone working as a contractor was paying all the relevant tax it wasn't that much different to the rate paid via PAYE so the individual shouldn't be seeing huge differences. It's obviously a big difference for companies though.
SB |  |
| Avatar - IC410 - Tadpoles Nebula |
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| Lineker VS HMRC over £5mill tax bill on 10:51 - May 7 with 1174 views | EddyJ |
From my experience working as an IT manager, legislation against "fake" contractors, like IR35, is absolutely needed.
My past two organisations have both massively exploited the contractor market, with up to 80% of the IT workforce consisting of contractors. Often, these contractors will work solely for the company for 2 years, leave for a couple of weeks, then come back and work for another 2 years in the same role. The contractor status seems to be solely for the individual to dodge tax.
Apparently, the reason companies like to employ such a large quantity of long-term contractors is that investors often judge a company on its revenue per employee. By filling "permanent" roles with long-term contractors, this ratio looks better than it actually is. |  | | |
| Lineker VS HMRC over £5mill tax bill on 10:53 - May 7 with 1157 views | Keno |
| Lineker VS HMRC over £5mill tax bill on 10:36 - May 7 by Keaneish |
IR35 is a joke. At a time when Limited Companies are on their knees, this legislation is a nail in the coffin for a lot of people forcing them into permanent employment. In my opinion, it’s such a short sighted initiative which does nothing for the individual, severely hampers certain sectors and their ability to recruit talent and puts more money in the hands of unnecessary middle men like Umbrella companies who layer on hidden costs to cover their own NI contributions - this is the real crime. |
It has long been a grey area and I can see why HMRC are trying to tidying it up, but I'm not sure these are the people they should be going for.
You have to question the ethics of firms 'engaging' people but doing on a basis that means the firm can avoid costs such as NI, Siick pay pensions etc etc [Post edited 7 May 2021 11:16]
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| Lineker VS HMRC over £5mill tax bill on 11:14 - May 7 with 1095 views | Kropotkin123 |
| Lineker VS HMRC over £5mill tax bill on 10:36 - May 7 by Keaneish |
IR35 is a joke. At a time when Limited Companies are on their knees, this legislation is a nail in the coffin for a lot of people forcing them into permanent employment. In my opinion, it’s such a short sighted initiative which does nothing for the individual, severely hampers certain sectors and their ability to recruit talent and puts more money in the hands of unnecessary middle men like Umbrella companies who layer on hidden costs to cover their own NI contributions - this is the real crime. |
In the IT sector, contracting has largely been a method of employment to dodge tax. I had contractors who had been employed for over three years at one company. I spoke to some people who had been contacting at one specific company for almost ten years. No other employment. It was legal tax dodging.
Of course there are also people who go from company to company every 3-6 months. But they are still taking up that line of work because it is usually better paid and comes with tax benefits from working b2b.
IR35 might not be the correct solution, but it is in response to systemic tax dodging from people in the highest tax brackets. |  |
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| Lineker VS HMRC over £5mill tax bill on 11:30 - May 7 with 1032 views | ElephantintheRoom |
| Lineker VS HMRC over £5mill tax bill on 11:14 - May 7 by Kropotkin123 |
In the IT sector, contracting has largely been a method of employment to dodge tax. I had contractors who had been employed for over three years at one company. I spoke to some people who had been contacting at one specific company for almost ten years. No other employment. It was legal tax dodging.
Of course there are also people who go from company to company every 3-6 months. But they are still taking up that line of work because it is usually better paid and comes with tax benefits from working b2b.
IR35 might not be the correct solution, but it is in response to systemic tax dodging from people in the highest tax brackets. |
Lineker is far from the only person being pursued. Anyone who pays themselves dividends whilst largely working for one or two clients is being hounded. Lineker is just PR to try and discourage thee great unwashed.
Its a pity that the government didnt use the Covid epidemic to highlight what taxes are used for. A decent health service and perhaps even the beginnings of a workable care system might be something people dont want to avoid quite so desperately any more. Despite all the evidence to the contrary coming out of Hartlepool | |
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| Lineker VS HMRC over £5mill tax bill on 13:36 - May 7 with 888 views | Keaneish |
| Lineker VS HMRC over £5mill tax bill on 10:46 - May 7 by StokieBlue |
The legislation was put in place a long time before the current situation though so to link it to limited companies not doing well at the moment isn't really fair.
Given tax changes over the last few years, if someone working as a contractor was paying all the relevant tax it wasn't that much different to the rate paid via PAYE so the individual shouldn't be seeing huge differences. It's obviously a big difference for companies though.
SB |
IR35 was put in place and then put on hold during COVID and it’s been reintroduced at the worst possible time in my opinion. There are lots of small limited companies out there, millions in fact and the difference in tax between PAYE and Ltd is very significant without a lot of hidden costs being added by 3rd party employment companies. I spoke with ACAS the other day and they inferred there’s a class action legal case either under way or imminently under way to uphold employment rights as millions are being affected by deductions that many deem unlawful. | |
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| Lineker VS HMRC over £5mill tax bill on 13:49 - May 7 with 853 views | StokieBlue |
| Lineker VS HMRC over £5mill tax bill on 13:36 - May 7 by Keaneish |
IR35 was put in place and then put on hold during COVID and it’s been reintroduced at the worst possible time in my opinion. There are lots of small limited companies out there, millions in fact and the difference in tax between PAYE and Ltd is very significant without a lot of hidden costs being added by 3rd party employment companies. I spoke with ACAS the other day and they inferred there’s a class action legal case either under way or imminently under way to uphold employment rights as millions are being affected by deductions that many deem unlawful. |
How can something be unlawful if a law was put in place as per your first line?
Others have highlighted the reason for the legislation in this thread but the process to start the changes to IR35 was put in place ages before the pandemic and was being phased into different jobs. You've not addressed any of those points (although perhaps you will).
The tax for someone working PAYE or working through a limited company should not be massively different unless they are never paying themselves any dividends or they are gaming the system in some way. The tax implications around dividends were changed to specifically ensure this was the case.
Perhaps it entirely depends on the scale of the role and the amount being earnt via the limited company. Can you give some examples where the difference is significant as otherwise it's just woolly language.
SB [Post edited 7 May 2021 13:50]
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| Avatar - IC410 - Tadpoles Nebula |
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| Lineker VS HMRC over £5mill tax bill on 14:27 - May 7 with 809 views | Keaneish |
| Lineker VS HMRC over £5mill tax bill on 13:49 - May 7 by StokieBlue |
How can something be unlawful if a law was put in place as per your first line?
Others have highlighted the reason for the legislation in this thread but the process to start the changes to IR35 was put in place ages before the pandemic and was being phased into different jobs. You've not addressed any of those points (although perhaps you will).
The tax for someone working PAYE or working through a limited company should not be massively different unless they are never paying themselves any dividends or they are gaming the system in some way. The tax implications around dividends were changed to specifically ensure this was the case.
Perhaps it entirely depends on the scale of the role and the amount being earnt via the limited company. Can you give some examples where the difference is significant as otherwise it's just woolly language.
SB [Post edited 7 May 2021 13:50]
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I agree it was put in place way before the pandemic, it was then paused and now reintroduced at a time when 4 million (approximately) Ltd companies had no government support during COVID. Now we’re nearing the end of COVID (hopefully) and markets are picking back up, some Ltd Companies and specifically freelancers are given two choices, either in or out of IR35. In IR35 means inflating a day rate to cover the increase in tax (and subsequently NI) and to cover 3rd party hidden costs.
This inflation is pricing people out as companies don’t want to / can’t pay it which is a twofold problem. Companies lose out in talent, freelancers lose out on employment.
You’re right that it depends on what figures and thresholds were talking about as it varies but as an example, I’m over the £37, 701 tax threshold inside IR35 and this, plus hidden employment costs (payment of third party NI is being discussed as whether is an ‘unlawful deduction’) has reduced my monthly take home by £1200 this month! A staggering figure given I was outside IR35 on the same rate the month prior and I’m not on emergency tax and should be operating within a tax free PAYE allowance bracket given it’s the new financial year. | |
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| Lineker VS HMRC over £5mill tax bill on 15:03 - May 7 with 758 views | Keaneish |
| Lineker VS HMRC over £5mill tax bill on 11:14 - May 7 by Kropotkin123 |
In the IT sector, contracting has largely been a method of employment to dodge tax. I had contractors who had been employed for over three years at one company. I spoke to some people who had been contacting at one specific company for almost ten years. No other employment. It was legal tax dodging.
Of course there are also people who go from company to company every 3-6 months. But they are still taking up that line of work because it is usually better paid and comes with tax benefits from working b2b.
IR35 might not be the correct solution, but it is in response to systemic tax dodging from people in the highest tax brackets. |
Agreed but IR35 doesn’t solve this as there are still ways around it. If the company is smaller than 50 people they can claim exemption, which is odd. If you’re employed on a ‘project’ basis, you can also circumnavigate IR35 (the term ‘project’ is very spurious).
If companies are willing, they can simply issue new contracts under new titles every 9 months or so if they can justify it allowing temporary employees to remain. Reality is, as per your example, companies should be pressured to replace employees after certain periods as 10 years is ridiculous. My argument is this should be at the discretion and burden of the company though rather than financial penalties levied against the employee.
Ltd Companies have been getting screwed for years and this is another low, especially for those at the lower end of the income bracket. This government should be encouraging entrepreneurship to stimulate commerce for the mass not penalising it. | |
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| Lineker VS HMRC over £5mill tax bill on 17:27 - May 7 with 654 views | glasso |
| Lineker VS HMRC over £5mill tax bill on 10:51 - May 7 by EddyJ |
From my experience working as an IT manager, legislation against "fake" contractors, like IR35, is absolutely needed.
My past two organisations have both massively exploited the contractor market, with up to 80% of the IT workforce consisting of contractors. Often, these contractors will work solely for the company for 2 years, leave for a couple of weeks, then come back and work for another 2 years in the same role. The contractor status seems to be solely for the individual to dodge tax.
Apparently, the reason companies like to employ such a large quantity of long-term contractors is that investors often judge a company on its revenue per employee. By filling "permanent" roles with long-term contractors, this ratio looks better than it actually is. |
The other reason for this is that the company owes them no benefits like sick pay, holiday pay etc if they're not employees, so the company benefits as well.
When people chirp on about all these incredible benefits directors of small limited companies get, they conveniently forget all the perks they lose out on, too. | | | |
| Lineker VS HMRC over £5mill tax bill on 17:29 - May 7 with 648 views | Swansea_Blue |
“It is a question of whether he is employed by the BBC or not,” said Jon Holmes, Lineker’s agent. “Most people, once they understand employment law, would say of course he isn’t. He works for many other people.”
Doesn't sound like Linekar's agent understands employment law himself. It's not my thing either, but I know I've been employed by multiple companies at the same time in the past and registered as a PAYE for each. My Mrs has been for years and still is as she does external examining work. |  |
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