The Department of Culture, Media and Sport Committee has sharply castigated the BBC for forcing staff to work through personal service companies. The influential Parliamentary Committee also recommends that the corporation should now offer compensation to the affected presenters, some of whom are facing tax and NIC bills of hundreds of thousands of pounds.
The Committee’s report (BBC Annual Report and Accounts 2017–18: Equal pay at the BBC) condemned the broadcaster for inflicting “life-altering” financial and emotional consequences on the individuals affected. The BBC had, between 2007 and 2012, deliberately engaged presenters whose contracts were likely to be more than six months or worth over £10,000 via PSCs.
The Committee saw strong evidence that the BBC manipulated presenters into believing that a PSC was an obligatory condition of work, a finding the Chair, Damian Collins MP, described as “disgraceful”.
Commenting, Seb Maley, CEO of Qdos Contractor, the specialist IR35 and tax advisory service for contracting professionals, emphasised that the BBC case was unusual. The overwhelming majority of contractors using PSCs have actively chosen to do so because of the freedom on offer, not, as stereotypes would have it, for improved tax efficiencies. The BBC, however, pushed the affected individuals into this engagement arrangement solely to benefit the corporation. The report, he noted, suggests that the affected presenters would not have freely chosen to work in this way.
The findings, Maley said, amounted to a “damning indictment” of the BBC’s mishandling of its own presenters’ IR35 status. No organisation engaging contractors should force them into working arrangements solely for the hirer’s benefit or simply for convenience, adding: “With private sector IR35 changes looking increasingly likely, the BBC’s mismanagement of IR35 is something millions of engagers must be very aware of.”
Meanwhile, Jordan Marshall, Policy Development Manager at the Association of Independent Professionals and the Self Employed, described the BBC’s handling of these presenters’ tax affairs as “shambolic” but pointed the finger of blame at the Government’s “crude and unworkable” tax policies.
The BBC “debacle” illustrated the folly of the Government’s IR35 reforms, he said, with the corporation suddenly facing an impossible task of making thousands of IR35 assessments using a flawed and inaccurate employment status tool (CEST). They simply pronounced many presenters as self-employed, unleashing the very chaos that the Committee has now condemned.
Addressing plans to extend these reforms to the private sector, Marshall said: “The Chancellor should think twice if he wants to avoid a repeat of the chaos seen at the BBC and many other public sector bodies since the reforms were implemented last year. If not, the BBC’s situation is just the tip of the iceberg.”