The Association of Independent Professionals and the Self Employed (IPSE) has warned that the BBC wage debacle revealed by several of its presenters to the Digital, Culture, Media and Sport Committee yesterday provides potent evidence against a roll-out of IR35 regulations to the private sector.
Radio 4 presenter, Kirsty Lang, described how she had been told to go freelance by her employer for tax purposes by setting up a personal service company (PSC), which she had been very nervous about doing. As she was no longer entitled to any statutory employment rights like paid bereavement leave, she was forced to continue working to remain solvent after the sudden death of her stepdaughter. She subsequently fell ill with cancer and was forced to continue working through her treatments as she was not entitled to paid sick leave.
Like many other presenters in her situation, Lang was told last April that she would be placed on the PAYE system due to new public sector IR35 rules, but simultaneously informed that she would not receive any statutory employment benefits.
100 BBC presenters face the prospect of an HMRC investigation because it believes they may have paid insufficient tax under new IR35 rules after being pushed by the BBC to set up PSCs prior to the rule changes last April or lose their jobs.
Chris Nove, a presenter with BBC Radio Oxford, told the committee in written evidence that he remains “constantly worried” that he may be made homeless if the BBC pursues the recovery of tax it had “unilaterally decided” to pay HMRC on his behalf after IR35 rule changes
Yet, on the same day as the Spring Statement last week, the government confirmed that its consultation on extending these rules to the private sector would start in the “coming months.”
Referring to the BBC presenters’ testimonies as “further evidence of the chaos caused by the Government’s ill-judged policy to transfer the IR35 burden from the contractor to the public authority which hires them”, IPSE’s Deputy Director of Policy and Public Affairs, Andrew Chamberlain, said that the inaccurate CEST tool had forced many organisations to unfairly push all off-payroll engagements into IR35.
“This has resulted in highly skilled, professional contractors fleeing the public sector, robbing it of vital specialist skills, damaging public services and leading to delays in major projects.
“We are very concerned the changes may be wreaking havoc in the NHS.
“Extending the IR35 changes to the private sector will cause further chaos and will damage the competitive advantage of the UK workforce – its flexibility – at a time when it is needed the most.”