Former Footballer Neil McCann Loses IR35 Battle Against HMRC

Neil McCann, a former footballer turned pundit, has recently faced a significant setback in his legal battle against HMRC over off-payroll working rules, commonly known as IR35. The Upper Tier Tribunal dismissed McCann's appeal on Friday, April 5, upholding the decision made by the First Tier Tribunal in March 2022.

At the heart of the dispute was McCann's claim that he worked as a freelancer through his company, McCann Media Limited, and therefore should not be subject to IR35 regulations. However, HMRC argued that McCann's contract with Sky could not be considered as a business on his own account, and as a result, he should have made national insurance payments for work carried out between 2013 and 2018.

The Upper Tier Tribunal's decision has left McCann facing a substantial tax bill, estimated to be around £210,000. This case serves as a stark reminder of the potentially devastating financial consequences that can arise from IR35 non-compliance, even if the individual in question had no intention of breaking the rules.

Michael Cleavely, CEO of IR35 consultancy CoComply on the beyond borders podcast, emphasised the importance of reviewing contracts from an IR35 perspective to avoid such situations. He noted that the complexity of the legislation makes it easy for honest mistakes to occur, but HMRC has little sympathy for those who fall foul of the rules.

Of the six IR35 cases that have been appealed to the Upper Tribunal and received final judgments, only one has been successfully appealed. This underscores the importance of presenting a comprehensive and well-corroborated case at the First Tier Tribunal stage.

The dismissal of Neil McCann's appeal is the latest in a series of high-profile IR35 cases involving celebrities and media personalities. Earlier this year, Loose Women presenter Kaye Adams emerged victorious in her 10-year tax battle with HMRC after the tax authority decided not to appeal a First Tier Tribunal judgement that ruled her outside of IR35 legislation.

As the IR35 landscape continues to evolve, it is crucial for contractors, freelancers, and businesses to stay informed about their obligations and seek professional advice to ensure compliance and avoid costly legal battles with HMRC.