The BBC has become embroiled in a dispute with over 170 of its presenters regarding their tax arrangements and the use of personal service companies (PSCs)
This follows a recent First Tier Tribunal (FTT) IR35 decision which saw one presenter required to pay £400,000 of tax owing following HMRC’s challenge to her employment status.
In press statements following the FTT ruling, the BBC said it had not forced presenters to use PSCs, and pointed out that prior to April 2017 and the introduction of new rules around off payroll working in the public sector, it was not required to check the tax status of its staff.
However, a group of 170 presenters has sent a letter to the Daily Telegraph which states: ‘The BBC did in effect force many presenters, both staff and freelance, into setting up PSCs. Presenters were told that if they did not form a PSC, the BBC would no longer give them any work. Many of them did not want to set up a PSC but felt they had no choice.’
For its part, the BBC has rejected the notion that its original statement was incorrect, and said that it was and remains standard industry practice to engage freelancers working for multiple organisations via a PSC.
The BBC’s subsequent statement said: ‘From April 2017 the responsibility for assessing employment status and applying PAYE and NIC has fallen to the BBC, at the same time, HMRC introduced a new approach to how they test employment status. Which means that they regard many more people as potentially subject to PAYE and NIC at source, where they would have been paid gross in the past. The implementation and timing of this change has proved very challenging and the BBC is aware of all the issues in this letter.
‘We remain committed to fully supporting all our on air presenters through this transition.’
The group of 170 presenters has also told the newspaper that the BBC has reworded its contracts in the last 12 months, introducing an indemnity clause they describe as ‘draconian’.
The group claims the contracts now state: ‘Should HMRC or other relevant body or authority make any claim against the BBC in respect of your tax or national insurance liabilities, you shall fully indemnify and hold harmless the BBC from such claims to the fullest possible extent.’
Last month at an FTT, Look North presenter Christa Ackroyd was found to have an employment contract with the BBC, despite supplying services via a PSC, partly on the grounds that the BBC exercised significant control over when and how she worked.
Three more presenters - Joanna Gosling, Tim Willcox and David Eades – are set to have their cases heard at tribunal next month.
Report by Pat Sweet
