Writing on twitter, tax barrister Keith Gordon of Temple Tax Chambers made us aware of a Tribunal decision which could be relevant to a large number of IR35 cases. In essence, it seems that HMRC have proceeded with a case without first establishing the full information, and on that basis the appellant, Gary Lineker, is allowed to challenge.
When HMRC consider that PAYE is owed they issue a Regulation 80 Determination which is the formal document outlining what HMRC believe is owed. Importantly, regulation 80 determinations are required to be made by reference to “what appears to HMRC”. However, in this instance HMRC issued the regulation 80 decision with a view to establishing the facts at a later date.
The Tribunal has permitted Lineker to challenge the validity of the regulation 80 determination on the basis that it was made prematurely without the full facts of “what appears to HMRC”. It is likely that several other IR35 cases brought by HMRC started with a regulation 80 determination without the full facts, so it will be very interesting to see how this plays out. The Tribunal has not ruled on the case itself which will need to go to a full hearing.
Lineker’s case has been grabbing the headlines with a potential liability of £4.9m. However, the reality of the situation is likely to be a much lower amount as Lineker was using a limited liability partnership so will have already paid a significant amount of tax towards the purported bill.
Furthermore, it seems that HMRC are unlikely to win this case given that the similarities to other recent cases which have found celebrities to be truly independent. Recent findings have been that Kaye Adams and Lorraine Kelly were in business on their own account using their personal brand.