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Some tentative lessons from the Lineker case

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The Gary Lineker Media (GLM) decision (G Lineker and another (t/a Gary Lineker Media) v HMRC [2021] UKFTT 101 (TC) on certain case management issues raises a number of issues that can be interpreted as signs of HMRC intent. If so, it raises some crucial points. The match has not really started yet and so far at least the referee has signalled that they are not to be influenced by the bigger side.

GLM seems to be a general partnership. It is within the intermediaries (IR35) rules, courtesy of ITEPA 2003 s 52(2)(b). It is an unusual choice of intermediary as it is tax transparent and indeed HMRC acknowledges that there is a substantial tax credit extant on the income in question. There is perhaps a significant difference in NICs claimed, paid and ultimately due. This decision is on a couple of case management matters. This is also unusual as such matters are normally agreed between the parties without a need to bother the tribunal. Whilst we do not have the full grounds of appeal spelt out in this decision, we can perhaps draw some tentative lessons from it.

First, why has HMRC started to use the ‘vagueness’ argument so early in the tribunal process? Here, HMRC says (at para 12) that the grounds advanced are ‘insufficiently precise for either HMRC or the tribunal to understand’. (You have to love the attempt to be the referee’s friend). We have seen similar attempts from HMRC in unreported cases. HMRC claim, often after many years of enquiry, that they don’t know the grounds of appeal. That speaks to either a lack of diligence from the taxpayer’s advisers or a shockingly incompetent HMRC enquiry. If the latter, this is not a marginal (VAR assisted) offside decision, but missing an open goal from a yard out!

Second, HMRC has attempted to limit the tribunal in terms of its ability to direct how the tax already paid should be treated. We have seen in the recent decision in Hoey [2021] UKUT 82 (TCC) the extraordinary (but successful) attempt by HMRC to argue that a PAYE credit can be applied only at the discretion of a County Court in collection proceedings. This appears to be an extension of that argument. In our view, it is a potentially dangerous precedent where a tax tribunal, with its expertise and knowledge, is forced to hand over the matter of money to a less expert forum. It’s difficult to see what advantage HMRC seeks other than to shield their actions from the scrutiny of trained experts.

GLM has won its points here. The partnership can advance additional grounds against the quantum of the liability and the 2013/14 NICs notice.

In doing so, perhaps HMRC has exposed some weaknesses in its defence and has revealed some of its tactics in this and future matches. Hopefully, it will also bring to the attention of the tribunals that a defence of ‘we don’t know what game we’re playing’, is hopeless. Sadly, I fear not and expect to see HMRC make this claim more often. The question of how far the tribunal can go in directing how HMRC deal with tax collection and credit promises to be mired in midfield for a long period, perhaps until the Court of Appeal or higher applies its VAR skills. 

Graham Webber, founder and director of tax, WTT Consulting

Issue: 1531
Categories: In brief