Gary Lineker 5m IR35 Case – Is No Mutuality of Obligation Now Proven?

IR35 Blanket Ban Companies on Contractors
IR35 Blanket Ban Companies on Contractors

No Mutuality of Obligation Now Established

Gary Lineker has had a tax demand from HMRC for 4.9 million pounds which he is disputing.

He is a freelancer at the BBC so he believes he does not come under the BBC’s impartiality rules as he was not commenting on the Government’s Immigration rules while on the BBC.

Also, as a freelancer, he believes he does not come under the Government’s IR35 rules. He operates via a limited company.

HMRC believe that he does come under their Off Payroll IR35 rules and want 4.9m from him.

However, his suspension could be an unexpected boon to him.

Main IR35 Tests

There are three main IR35 tests to see if freelancers are caught by IR35. They are:-

  1. Mutuality of Obligation
  2. Substitution
  3. Control

Of these the most important test for IR35 is Mutuality of Obligation.

Mutuality of Obligation Crucial IR35 Test

Mutuality of Obligation means that there is an obligation on a company to provide work for a freelancer and to pay the freelancer for that work and an obligation by a freelancer to do that work.

Mutuality of Obligation is crucial in determining a contractor’s IR35 status.

Indeed in Ireland if no mutuality of obligation can be proved between the client company and the freelancer then that is game set and match and the freelancer is judged to be outside IR35 without there needing to do the Control and Substitution IR35 tests.

Gary Lineker and the BBC

Gary Lineker has been working for the BBC for 20 years as a freelancer so that would be a pointer to being inside IR35.

During that time Gary did the work and was paid each time he did it.That would seem to point to being inside IR35.

However, it was never tested – until now.

No Obligation to do the Work

The fact that the BBC, it seems, believed it had no obligation to provide work for him is shown by their suspending him without pay.

That is a strong pointer to him being outside IR35, there being no mutuality of obligation on the BBC to provide him with work or to pay him for it.

It also shows that there was no obligation on Gary Lineker to do the work.

IR35 Even Greater Bonus for Other Sports Pundits Who Refused to Work for BBC

However the IR35 bonus is even greater for the other sports presenters who have refused to work for the BBC till this is settled.

It could be argued that Gary Lineker was suspended which could happen to an employee. The employees, however, would still be likely to be paid.

However, Ian Wright and all the other Sports Commentators and Pundits who refused to work are in an even better position.

None of them were suspended.

No Mutuality of Obligation on Pundits

They just decided that they would not do the work which, if they are not punished or sacked would tend to show that there was no obligation on them to do the work. You could also argue that this also showed that there was no obligation for the BBC to pay them.

This could turn out to be a major blow for the Government, the Treasury and HMRC.

There was no precedent for this previously. It could not be proven either way of there was a mutuality of obligation. You could argue it either way.

Now, for the first time, there is a precedent.

Bad News on IR35 for Government and HMRC

The freelance commentators and pundits have shown that there really was no obligation on them to do the work and get paid for that work.

This IR35 bonus could be extended to other parts of the BBC where freelancers operate.

It could also be extended to those who work on a freelance basis for other TV channels or even those who freelance for newspapers.

Perhaps it may even get used in the cases of other freelancers who could argue that they are hired on the same basis.

It was the Irish courts who ruled that if there was no Mutuality of Obligation then contractors could be considered outside their equivalent of IR35 without any further tests.

It will be very interesting to see how this progresses.



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