Gary Lineker recently won a long-standing battle against HMRC, having been wrongly accused of underpaying £4.9m in tax (Gary Lineker and Danielle Bux T/A Gary Lineker Media, [2023] TC08774).
Mr Lineker set up the Gary Lineker Media (GLM) partnership in 2012 with his then wife Ms Bux, and used it to channel his earnings from the BBC and his other job with BT Sport. The partnership gave Ms Bux a £30,000 "fixed profit share" for accompanying her husband to promotional and marketing events.
This arrangement is legal, but HMRC pursued Mr Lineker and others who have used partnerships and personal service companies, arguing that they were effectively employees and should have paid tax at the same level as those on the payroll.
Lineker's case was the first time that the issue of whether there was a direct contract has come before the Tribunal. In all previous cases in which the intermediaries legislation has been considered, the intermediary has been a limited company and, as a result of such a company having a separate legal personality from the client who might be a director or shareholder of the company, the question of whether there was a direct contract between the client and worker has not arisen.
After examining the contractual documentation, the Tribunal decided "It must therefore follow that, as a matter of law, when Mr Lineker signed the 2013 BBC Contract, the 2015 BBC Contract and the BT Sport Contract for the provision of his services, he did so as principal thereby contracting directly with the BBC and BT Sport. As such, the intermediaries legislation cannot apply – it is only applicable "where services are provided not under a contract directly between client and the worker"."
In summary, Lineker won his case, not by arguing about complex matters of status law, but because his situation was unique, in that he operated via a partnership and had a direct contract with both the BBC and BT Sport.
HMRC have sought to appeal the last four cases they have lost at the First-tier tribunal, so it would not be surprising if they seek to do so again with this case.
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