The whole debacle into the way in which the BBC pay its workers arose due to the change in IR35 legislation for self-employed workers, operating within the public- sector, introduced from April 2017. A Select Committee Hearing on 20th March of this year also made this issue rather controversial when TV and radio presenters gave evidence regarding their experiences with the BBC over pay, one of whom became so traumatized by the pressure exerted over them, that they considered committing suicide.
Evidence given at the Select Committee suggested that BBC workers were forced to operate via a personal service company (PSC), rather than being taken on by the BBC as an employee, despite the wishes of the worker, many of whom did not want to set up a PSC. By paying workers via a personal service company it allowed the BBC to make significant savings in terms of National Insurance Contributions.
It seems however that this was not true of all self-employed workers, within the BBC, as it has been recently reported in the press that many high- profile presenters are absolutely ‘livid’ at the possibility of being reclassified as an employee and have accused the BBC of unfair treatment. This would effectively mean that their take home pay will be significantly reduced by having to pay the top rate of income tax, as a result of their high earnings. The BBC apparently do not wish to pay higher salaries to negate the increase in tax payments because this would in turn increase the BBC’s NI bill.
Such a change in employment status could also leave presenters exposed to a HMRC challenge regarding their status into previous tax years, as occurred with Christa Ackroyd a former ‘Look North’ TV Presenter, who was forced to pay over £400k in unpaid tax.
Perhaps a good place to start for the BBC might be to actually determine the wishes of their workers. Only the employment status of those who do wish to continue operating on a self-employed basis via their own PSC, will need to be established.
However, the BBC are struggling to determine the tax status of its self-employed, and its biggest obstacle appears to be HMRC’s CEST tool, which has been heavily criticised since its introduction in 2017. Some of the questions the tool asks are extremely difficult to apply within the media industry. When discussed in the Select Committee Hearing on 20th March it quite literally became a laughing stock. Since change in legislation regarding IR35 in the public sector HMRC have failed to provide sufficient guidance, which is why so many huge public- sector organisations like the BBC, and the NHS have got it so wrong; the NHS having adopted a blanket ‘inside of IR35’ approach for their off-payroll workers.
Although HMRC have had some success with the Christa Ackroyd CAM Media case, such success is limited. There have been a number of IR35 appeals taken to Tribunal of late, the majority of which HMRC have lost. It’s about time HMRC realised that something is wrong, that they cannot continue to ignore decisions laid down by the Tribunals, and that it is not right to have two of the countries most established institutions in such disarray because of the change in legislation. Let’s hope this realisation comes sooner rather than later…