By Lynne Gowers on 12th March 2018

IR35 in the spotlight as PSC row rumbles on at the BBC

BBC IR35

A dispute has erupted between the BBC and 170 of its presenters over their tax arrangements and their use of Personal Service Companies (PSCs).

It follows an IR35 tribunal decision last month which saw one presenter, Crista Ackroyd (formerly of regional broadcast Look North), hit with tax demand of over £400,000 following HMRC’s challenge to her employment status.

The tribunal found that the contract between Miss Ackroyd and the BBC was one of employment, despite supplying her services through a PSC, partly on the grounds that the BBC exercised significant control over when and how she worked.
Find out how IR35 status is determined

Were presenters coerced by the BBC to use PSCs?

Despite ruling against her, HMRC said that she should not be criticised as she had been encouraged by the BBC to claim her salary through a personal service company.

In subsequent press releases, the BBC refuted this, saying that 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, the Corporation was not required to assess the tax status of its staff.

More than 100 presenters are being investigated by HMRC over their use of PSCs, including household names such as Nick Knowles.

But a group of 170 presenters have written to the Daily Telegraph, claiming that the organisation has been misleading the public on this issue.

They emphatically state that: “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.”

The group, who have withheld their names for fear of reprisal, also revealed that the BBC has added a “draconian” indemnity clause into its contracts, stating:

“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”.

For their part, the BBC rejected that its original stance was incorrect, and said that it was, and still is, industry practice to engage freelancers working for multiple organisations via a PSC.

Keep your eyes open to IR35

With some BBC presenters potentially facing 6-figure tax bills, this case goes to show that no-one is immune to the long arm of HMRC in relation to IR35 and employment status for tax.

If you are a contractor or freelancer operating through a PSC, our straight-talking video guides cut to the chase, helping you understand IR35 and what it means for you.

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Lynne Gowers Written by Lynne Gowers

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