HMRC is investigating around 100 BBC presenters over claims they used personal service companies (PSCs) in a bid to reduce the amount of tax they paid when working as staff at the organisation, according to evidence presented to a First Tier Tribunal (FTT)
The information came to light as a result of an FTT hearing in July into a procedural issue about whether the BBC could supply evidence to a separate tribunal. This second tribunal is considering an appeal by two BBC news presenters, Tim Willcox and Joanna Gosling, over whether their PSC arrangements met the requirements of IR35. [Paya Ltd, Tim Willcox Ltd and the Commissioners for Her Majesty’s Revenue and Customs, [2016] UKFTT 660 TC05386].
In the event, the FTT looking at the procedural question decided against allowing the BBC to submit an application to give evidence. However, the documents provided show that in July last year HMRC was in the process of working through a list of 469 people who had been engaged by the BBC via PSCs, to establish whether further investigations should be initiated. By the autumn HMRC was considering opening inquiries into the tax affairs of 100 individuals described as ‘on-air talent’.
The BBC’s argument to the tribunal was that this was an industry-wide issue which should be dealt with on that basis, rather than by seeking to reclaim income tax and national insurance contributions from individuals.
The BBC submission stated: ‘HMRC have indicated to the BBC that there are around 100 additional cases under consideration involving current or former BBC presenters. The BBC also understands that HMRC has initiated or indicated their intention to initiate IR35 proceedings in relation to presenters who are engaged by other broadcasting organisations.
‘The appeals are therefore extremely important not only to the individuals in question but also to the BBC and to the broadcasting industry as a whole. The appeals are likely to be the first cases to test the freelance model in the broadcasting industry against the IR35 legislation.’
In a statement, the BBC said the arrangements under discussion were made during the period 2006 to early 2013, and the corporation has since developed new guidance on the use of PSCs for staff members.
‘It is up to individuals to ensure they pay the right tax, and since 2013, the BBC has adopted a new employment status test that provides a clear and consistent approach to the employment status of journalists and presenters,’ the statement said.
An HMRC spokesperson said employment status is ‘never a matter of personal choice and is always dictated by the specific facts’.
HMRC said: ‘When the employment relationship does not accurately reflect the underlying reality of the relationship, the wrong tax is paid then we intervene to ensure the rules apply as parliament intended.
‘While there can be many legitimate business reasons for workers being employed through their own companies, there are rules in place enabling HMRC to make sure people who provide their services in this way pay the right tax and National Insurance.
