By Esmée Hardwick-Slack
Chair of the Public Accounts Committee, Meg Hiller, has said the BBC has failed to untangle the “mess” it has made of presenters’ tax affairs. The statement came as the National Audit Office (NAO) found that 800 presenters could yet face crippling tax demands.
According to the NAO report, the BBC has paid around £700m over the past seven years via personal service companies for presenters and backroom staff. The company has previously been embroiled in controversy over its agreements with freelancers.
Some of the freelancers the BBC hires operate as a “personal service company” (PSC). This means the person is self-employed, rather than being employed onto the BBC’s payroll. It is legal and very common across the media industry.
Before April 2017, any freelancer working for the BBC as a PSC had to inform HMRC of their employment status for tax purposes to ensure they would pay the right amount of tax. However, after April 2017, a change in the law meant it was up to public bodies like BBC to become responsible for determining the employment status of the PSC.
Following this, the BBC began using a new HMRC tool to assess the employment status of its freelancers. This started giving different results as the tool was classing them as employed rather than self-employed. In March this year, a group of 170 presenters wrote an open letter expressing dissatisfaction with how the BBC handled the changes.
The NAO report says that potentially 800 presenters could be asked to pay back tax, with HMRC currently investigating 100 – some with unpaid bills running into thousands of pounds.
Meg Hiller has said: “We raised concerns about the BBC’s use of personal service companies six years ago. It is worrying that, six years on, the mess of clarifying the employment status for tax purposes of people the BBC hires through PSCs has not fully entangled.
“With around 100 investigations into PSCs still outstanding, the BBC and HMRC must work together to ensure certainty for freelancers working for the BBC, particularly for those freelancers who have been left in desperate circumstances.”
A BBC spokesperson has said: “We recognise there are still issues to address and remain committed to resolving them. We are currently in discussions with out presenters and are actively engaging with HMRC to explore the options for resolution.”
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