The National Audit Office (NAO) has published its report on the BBC’s decision to re-categorise many of its on-air freelancers as employees in 2017, finding many issues still unresolved in mid-2018, with the corporation yet to recoup some £2.9m in tax and NICs from individuals affected.
The NAO began an investigation of the issues around individuals hired by the BBC on a freelance basis, particularly those engaged through personal service companies (PSCs), following the considerable publicity given to concerns raised by Parliament and BBC employees.
The BBC used HMRC’s ‘check employment status tool’ (CEST) to implement the public sector IR35 changes from April 2017. After some initial problems, it was not until August 2017 that the BBC felt sufficiently confident to rely on CEST. By June 2018, it had assessed 663 on-air freelancers, with 92% receiving an ‘employed for tax purposes determination’ from CEST. Prior to this, the BBC treated the majority of on-air freelancers as self-employed.
Between April and September 2017, the BBC paid £8.3m to HMRC on account of any tax that was potentially due. The corporation started to recover this money from individual employees once their employment status for tax purposes had been determined. However, some individuals continue to dispute these demands and £2.9m was still outstanding in June 2018.
The BBC has offered help to individuals affected, in some cases with bridging loans, and has set up an independent mediation process. The corporation is also currently working with HMRC, alongside others in the media industry, on updating HMRC’s employment status manual.
By May 2018, the BBC identified some 800 presenters, nearly 300 of whom were hired through PSCs, as at risk of challenge from HMRC. According to HMRC, in October 2018 there were around 100 open investigations into BBC-related personal service companies, all for tax years before 2017 and most opened before the IR35 reform.
See ‘NAO investigation into the BBC’s engagement with personal service companies’, https://bit.ly/2FyswXG.
The National Audit Office (NAO) has published its report on the BBC’s decision to re-categorise many of its on-air freelancers as employees in 2017, finding many issues still unresolved in mid-2018, with the corporation yet to recoup some £2.9m in tax and NICs from individuals affected.
The NAO began an investigation of the issues around individuals hired by the BBC on a freelance basis, particularly those engaged through personal service companies (PSCs), following the considerable publicity given to concerns raised by Parliament and BBC employees.
The BBC used HMRC’s ‘check employment status tool’ (CEST) to implement the public sector IR35 changes from April 2017. After some initial problems, it was not until August 2017 that the BBC felt sufficiently confident to rely on CEST. By June 2018, it had assessed 663 on-air freelancers, with 92% receiving an ‘employed for tax purposes determination’ from CEST. Prior to this, the BBC treated the majority of on-air freelancers as self-employed.
Between April and September 2017, the BBC paid £8.3m to HMRC on account of any tax that was potentially due. The corporation started to recover this money from individual employees once their employment status for tax purposes had been determined. However, some individuals continue to dispute these demands and £2.9m was still outstanding in June 2018.
The BBC has offered help to individuals affected, in some cases with bridging loans, and has set up an independent mediation process. The corporation is also currently working with HMRC, alongside others in the media industry, on updating HMRC’s employment status manual.
By May 2018, the BBC identified some 800 presenters, nearly 300 of whom were hired through PSCs, as at risk of challenge from HMRC. According to HMRC, in October 2018 there were around 100 open investigations into BBC-related personal service companies, all for tax years before 2017 and most opened before the IR35 reform.
See ‘NAO investigation into the BBC’s engagement with personal service companies’, https://bit.ly/2FyswXG.
