Sky Sports activities tennis presenter has misplaced an IR35 tax case in opposition to HMRC on a technicality.
Barry Cowan had appealed a earlier choice by HMRC that he ought to be handled as an worker of Sky for tax functions, regarding work carried out between the 2014 and 2019 tax years.
The attraction was made by a partnership middleman, Cranham Sports activities, by which Cowan is a member.
In June 2021, HMRC mentioned after taking a look at communications between Sky and Cranham Sports activities, the connection between Sky and Cowan was one among service, and Cowan ought to be handled as employed by Sky.
A part of the attraction 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 overview if requested inside 30 days.
Though the opposing facet 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 overview had been made for 30 days.
Cowan’s representatives later argued that the dispute ought to stay open till HMRC had absolutely responded to those factors.
A request for a overview was finally despatched by 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 purpose apart from the consultant made a mistake and basically didn’t realise or consider, in gentle of the e-mail of 8 December 2021, that point was operating in opposition to the applicant.
“Somewhat than search to remediate the place as quickly as potential the consultant continued to lock horns with what he thought-about to be the outrageous conduct of HMRC.
“He didn’t attraction however continued to make criticism to HMRC,” she mentioned.
Dave Chaplin, chief government officer of IR35 Defend, mentioned had this case gone to a tribunal the result could have been totally different.
“This highlights the significance, notably in IR35 circumstances, why taxpayers ought to have interaction with specialist advisors to defend them.
“Shedding a battle on a procedural level, with out even entering 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 attraction it inside 30 days, this fundamental error has resulted within the case being misplaced, and the power to attraction not permitted. Had it gone to tribunal, the result could have been totally different.
“This highlights the significance, notably in IR35 circumstances, why taxpayers ought to have interaction with specialist advisors to defend them. Shedding a battle on a procedural level, with out even entering into the ring will clearly be very disappointing for Mr Cowan.
“Studying the ruling, it seems an opinion was shaped 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 received a case, and not using a full listening to, the style about which they’ve performed so, raises considerations.
Qdos CEO, Seb Maley, added: “You need to really feel for Barry Cowan. By means of no fault of his personal, he received’t have the possibility to attraction. If latest IR35 circumstances involving Sky Sports activities presenters are something to go by, this big error might have price him a fortune.
“Submitting an software to attraction is straightforward stuff – it ought 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 attraction 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 help you may rely on. IR35 circumstances can carry tens of millions 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 attraction in opposition to HMRC over whether or not he was instantly employed by ITV as a presenter on This Morning.
In the identical month, Gary Lineker received his battle over almost £5mn in what HMRC mentioned was unpaid tax.