Former Sky Sports presenter and columnist for The Times Stuart Barnes has won a first-tier tax tribunal regarding his IR35 status, carrying £695,000 in tax liability.
Barnes, who was previously a professional rugby union player before retirement, and his limited business S and L Barnes, were under investigation for contracts held with Sky TV between 2013 and 2019.
He received notification from HMRC that he should have been operating inside the IR35 legislation, and as a result owed a total of £695,461.97 in tax. This was made up of £481,364.20 from pay as you earn (PAYE), and £214,097.77 in national insurance (NI) contributions.
During the tribunal, it was established that Barnes’ contract with Sky was one part of his brand, and was where he received 60% of his income, while more than £150,000 on average would also be earned from other work commitments and broadcasters, which Sky was aware of.
Barnes’ appeal was successful, with the judge deeming Barnes to not be a disguised employee and therefore belonging outside the IR35 legislation, due to being in business on his own account.
Tribunal judge Heidi Poon said: “I have rejected the suggestion from the appellant that the similarities in the actual outworking of the contractual arrangements pertaining to Sky and those to the Times/Sunday Times should inform the substantive issue to any extent. The fact that HMRC have accepted the contractual arrangements with the Times/Sunday Times to fall outside the IR35 regime does not preclude the arrangements with Sky to fall within IR35.”
Seb Maley, chief executive officer of Qdos, added: “This is a big victory, not just for Stuart Barnes, but for freelancers, contractors and the businesses engaging these workers. This win could prove crucial in making it crystal clear to firms that forcing all contractors onto the payroll is unnecessary, not to mention expensive. That Barnes was deemed genuinely self-employed based on being in business on his own account is important, too.”
Tim Stovold, head of tax at Moore Kingston Smith, said: “Although HMRC were able to argue that Sky exercised some control over Barnes’ activities, required him to perform his duties personally and restricted him from taking on other activities like those performed for Sky, they failed to convince the tribunal that he should be taxed like an employee.”
