Sky Sports activities tennis presenter has misplaced an IR35 tax case towards HMRC on a technicality.
Barry Cowan had appealed a earlier choice by HMRC that he needs to be handled as an worker of Sky for tax functions, referring to work carried out between the 2014 and 2019 tax years.
The enchantment was made by a partnership middleman, Cranham Sports activities, by which Cowan is a member.
In June 2021, HMRC mentioned after communications between Sky and Cranham Sports activities, the connection between Sky and Cowan was one among service, and Cowan needs to be handled as employed by Sky.
A part of the enchantment rested on a declare by Cranham Sports activities that a few of the correspondence from Sky was not proven to them earlier than the choice was made.
HMRC initially despatched its choice to Cranham Sports activities in December 2021, outlining that Cranham Sports activities and Cowan might take up a suggestion of an inner evaluate if requested inside 30 days.
Though the opposing aspect replied to the e-mail, alleging HMRC had did not reply to factors outlined in an e mail on the finish of July that summer season, HMRC dominated that no request for a evaluate had been made for 30 days.
Cowan’s representatives later argued that the dispute ought to stay open till HMRC had totally responded to those factors.
A request for a evaluate was ultimately despatched by means of in February 2022, 60 days from the choice letter, which was refused by HMRC.
The tribunal decide, Amanda Brown KC, mentioned: “The applicant concedes that the delay had no motive aside from the consultant made a mistake and primarily didn’t realise or consider, in gentle of the e-mail of 8 December 2021, that point was operating towards the applicant.
“Somewhat than search to remediate the place as quickly as doable the consultant continued to lock horns with what he thought of to be the outrageous conduct of HMRC.
“He didn’t enchantment however continued to make grievance to HMRC,” she mentioned.
Dave Chaplin, chief govt officer of IR35 Defend, mentioned had this case gone to a tribunal the end result could have been completely different.
“This highlights the significance, notably in IR35 circumstances, why taxpayers ought to interact with specialist advisors to defend them.
“Shedding a battle on a procedural level, with out even moving into the ring will clearly be very disappointing for Mr Cowan.”
Commenting, Dave Chaplin, CEO and founding father of IR35 Defend, a tax advisory agency which specialises in IR35 and Off-payroll issues mentioned: “That is the second particular person to fall foul of the fundamentals, and lose their IR35 case on a procedural level, following the identical errors made within the case of Michael Lynagh.
“By not responding to the HMRC view of the matter letter and failing to enchantment it inside 30 days, this fundamental error has resulted within the case being misplaced, and the power to enchantment not permitted. Had it gone to tribunal, the end result could have been completely different.
“This highlights the significance, notably in IR35 circumstances, why taxpayers ought to interact with specialist advisors to defend them. Shedding a battle on a procedural level, with out even moving into the ring will clearly be very disappointing for Mr Cowan.
“Studying the ruling, it seems an opinion was fashioned by HMRC, with out the taxpayer having full entry to the fabric upon which the opinion was made. That doesn’t chime with the idea of treating taxpayers pretty, and while HMRC has gained a case, and not using a full listening to, the style about which they’ve performed so, raises issues.
Qdos CEO, Seb Maley, added: “It’s important to really feel for Barry Cowan. By no fault of his personal, he gained’t have the possibility to enchantment. If current IR35 circumstances involving Sky Sports activities presenters are something to go by, this enormous error might have value him a fortune.
“Submitting an software to enchantment is easy stuff – it needs to be bread and butter for Cowan’s representatives. What’s actually worrying is that it’s not the primary time we’ve seen this occur. Late final yr it emerged that one other Sky Sports activities presenter, Michael Lynagh, had his request to enchantment denied as a result of his accountant missed the deadline.
“It goes with out saying that within the occasion of an IR35 investigation, you want assist you’ll be able to depend on. IR35 circumstances can carry hundreds of thousands in tax legal responsibility and HMRC is noticeably ramping up its compliance exercise on this space.”
On the finish of final month, Eamonn Holmes additionally misplaced an enchantment towards HMRC over whether or not he was instantly employed by ITV as a presenter on This Morning.
In the identical month, Gary Lineker gained his battle over practically £5mn in what HMRC mentioned was unpaid tax.