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Tax concerns prompt 'control' test for BBC freelancers

The BBC is set to run a much-anticipated employment test on its freelance professionals, both high-profile and obscure, as it seeks to clamp down on personal service companies (PSCs). Clients of Richmond accountants may remember the corporation promising to carry out the test a year ago, following negative national press coverage of its use of PSCs and a critical report from the Public Accounts Committee.

Back then, the BBC had said that it would undertake the test on more than 800 ‘on-air’ workers who were paid not as individuals, but through their own limited companies. The report had said that the government and the BBC had too many staff making their own arrangements for the payment of tax and national insurance, potentially equating to a lesser contribution to the exchequer.

The new test will scrutinise the amount of editorial ‘control’ that the broadcaster has over the activities of each of the freelance workers, which are expected to be predominantly on-air. Should the assessment find a “significant” amount of BBC control of certain presenters and newsreaders, they will be asked to join the payroll, enabling them to be taxed at source rather than allowed to continue with their PSC.

The BBC stated in a news item outlining the assessment that it could not accurately gauge the number of ‘to camera’ freelancers set to be affected, given the “case-by-case basis” on which the test will be run, although top BBC talent, such as Jeremy Paxman and Fiona Bruce, could be within scope. Users of Richmond accountants may be interested to read that so-called ‘off air’ BBC freelancers are already being assessed for the appropriateness of their use of PSCs.

It is estimated by the corporation that around one fifth of its 16,000 production freelancers presently operating through their own limited companies could be requested to join the payroll as employees of the BBC.

The trade group PCG, which represents many freelancers using Richmond accountants, expressed its disappointment at the corporation’s measures against its freelance talent, pointing out that a distinction between employed and self-employed was already made by existing tax rules like IR35. It said: “If there are concerns about tax, it is the tax system that should be reformed, not the way these experts are working.”

The group continued: “Rather than taking the retrograde step of pushing back against these vibrant, successful and rewarding working practices, the government should instead be embracing it.”

The BBC has described the employment test as its response to the criticism of the Public Accounts Committee, despite “no evidence” being found last November that PSCs were used by the corporation to assist tax avoidance. That the test is going ahead will doubtless concern many present and prospective freelance clients of Richmond accountants.