Everyone knows about the IR35 rules. Broadly, they apply if you provide your personal services to an ‘end user’ via a service company on terms that if the engagement had been made directly between you and the end user you’d have been an employee. There have been numerous cases over recent years, including some high-profile media personalities and presenters, sometimes resulting in decisions that are very difficult to reconcile with one another (for example, most recently Kaye Adams in Atholl House Productions Ltd).
Where IR35 applies, the service company is required to account for tax under PAYE as if it had paid (most of) the earnings to you as an employee. Or, in some circumstances (further extended from 6 April 2021) the end user is itself required to operate PAYE.
What is sometimes overlooked is that, although we refer above to ‘service companies’, IR35 does not apply only where a service company is involved: it applies where there is any ‘intermediary’ interposed between the putative employee and the end user. Nine times out of ten the intermediary is a company: but it may be an LLP, a partnership or even an individual.
We are reminded of this important fact by the recent First-tier Tribunal case of Gary Lineker Media v HMRC [2021] UKFTT 101 (TC). The case deals with some preliminary procedural matters – a sort of pre-match kickabout before the real contest kicks off – so has nothing to say of the detailed arguments to be adduced on either side. But it appears that for many years the services of Mr Lineker were provided to the BBC and to BT Sport by ‘Gary Lineker Media’ (the trading name of a partnership between Mr Lineker and his then-wife Danielle) and that HMRC assert that had Mr Lineker been engaged direct, his contract would have been one of service.
We look forward (though Mr Lineker probably doesn’t) to the match.
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