By Harry Mottram: Back in 1985 Stuart Barnes joined Bath from Bristol becoming known as the Bath Barrel as he made an impact in the club becoming by the end of his career at the Rec in 1994 one the greats of the team. With 196 appearances 53 tries, 313 conversions and 22 drop goals – the most famous being the last gasp drop goal at Twickenham to beat Quins in 1992 – Barnes was something of a legend.
Now he’s rather dropped himself in it as the taxman has been after his earnings as a Sky Sports commentator potentially giving him a £695,000 tax liability headache for his work on TV as a rugby pundit between 2013 and 2019.
HMRC overturned an appeal he made previously against the tax bill leaving him liable to pay up. It all stems from a dispute about his tax status as either a self-employed commentator working as part of his own business – S&L Barnes Ltd – for Sky TV, or as an employee of the sports channel. The Inland Revenue take the view that if you only work for one firm then you are an employee and can be taxed accordingly. Charlie Stayt for BBC Breakfast was recently caught up in a similar dispute – and so have other so-called freelancers in the media.
Ian Cameron of the website Rugby Pass explained: “Last year Barnes won a first-tier tax tribunal regarding his IR35 status which saw him avoid a £695,000 tax liability, pertaining to his work for Sky Sports between 2013 and 2019. Barnes had previously been notified by HMRC that he should have been operating within IR35 legislation and consequently owed £695,461.97 in tax, made up of £481,364.20 in PAYE and £214,097.77 in National Insurance contributions. HMRC have have now overturned the decision at the Upper Tribunal, overturning the first-tier tribunal’s decision.”
He went on to report CEO of IR35 Shield Dave Chaplin – who attended the upper-tier hearing in person – saying: “The Stuart Barnes case was a close call that could have gone either way. It’s crucial to note that HMRC’s first ground of appeal failed, with the Upper Tribunal upholding the First-Tier Tribunal’s decision regarding the variation of terms related to Sky’s ‘right of first call’.
“However, HMRC’s second ground of appeal, which was more controversial, did succeed. This ground focused on how the First-Tier Tribunal approached the third stage of the Ready Mixed Concrete test and which factors it considered relevant to go into the mix for the full evaluation. The surprising element was that the UT chose to interfere with the evaluative nature of a multi-factorial decision by a First-tier tribunal.
“Both parties requested at the hearing that if an error of law was found, they preferred the Upper Tribunal to remake the decision rather than remit it back to the First-Tier Tribunal. Had the case been remitted, it’s possible that the First-Tier Tribunal might have drawn a different conclusion – but it would have been a 50/50 chance.
“This ruling now means that none of the cases involving individuals providing services to Sky TV have succeeded at the tax tribunal.
“This case underscores the need for freelancers and their clients to ensure that their contracts and working practices accurately reflect the true nature of their relationship.”
Barnes was one of the stars of the club’s golden era of the late 80s and early 90s when Bath swept all before them. The club notes on their heritage site: “In a brilliant partnership with Richard Hill, Barnes proved to be the master of taking and giving of near flat passes, and introduced a superior brand of tactical awareness. Orchestrated by the coaching staff, it was to revolutionize Bath’s style of play and lead to a run of Cup and League success.”
Since leaving the sport in 1994 he has worked for the BBC and Sky Sports as a journalist and commentator – a profession that has brought him into conflict with the taxman. To read the Rugby Pass article visit https://www.rugbypass.com/news/hmrc-win-tax-case-against-stuart-barnes-over-sky-sports/
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Harry Mottram is a freelance journalist. Follow him on Facebook, LinkedIn, Twitter, Instagram, YouTube, Pinterest, Telegram, TikTok and Email:harryfmottram@gmail.com
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