This week has seen a number of BBC journalists slam the CEST tool, with those who gave evidence to the government’s Digital, Culture, Media and Sport Committee making some interesting revelations.
The journalists are being asked in a public evidence session on BBC pay. This follows on from the recent HMRC win against Christa Ackroyd.
As covered by Larsen Howie last month, former Look North presenter Ackroyd lost her appeal against HMRC covering tax years 2006/7-2012/13, and now owes National Insurance and Income Tax totalling £419,151.
It’s thought that Ackroyd’s case could merely be the tip of the iceberg. It is likely that further high-profile names could soon face similar verdicts and debts.
Evidence was given at the Palace of Westminster on 20 March by Liz Kershaw, on Radio Broadcaster for BBC 6 Music; Kirsty Lang and Paul Lewis, both of whom are Journalists and Broadcasters, and Stuart Linnel, a radio broadcaster at BBC Radio Northampton. Furthermore, Jolyon Maugham QC, Tax Lawyer, Devereux Chambers, also spoke to the committee.
Their respective comments were scathing of the BBCs actions. This included accusations that the organisation forced hundreds of workers to operate as personal service companies.
One topic that will interest contractors is a series of negative comments about HMRC’s Check Employment Status for Tax tool. Consequently, Kirsty Lang for one describing it as being ‘not fit for purpose’.
Never ones to shy away from commenting on the flaws of HMRC, industry body IPSE joined the debate. As a result they backed up what Lang and co have said about CEST.
“What we saw today (during the public evidence session) was 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,” said Andrew Chamberlain, IPSE’s Deputy Director of Policy and Public Affairs. “The criticisms of the CEST tool made today are entirely accurate. The CEST tool cannot be relied upon to make correct determinations. This is why many organisations feel forced to take a blanket approach. Pushing all off-payroll engagements into IR35 unfairly.”
IPSE has been vociferous in its opposition to IR35 reforms being extended into the private sector, and has long called for an independent review of the UK’s tax system, even releasing a manifesto about the topic last year.
“We’ve been trying to cram modern working practices into a rapidly aging tax system, and the cracks are starting to show,” Chamberlain said. “The UK tax system is no longer fit for purpose, it's based on an outdated principle that all income tax payers are employers or employees, which they are not. There are now 4.8 million self-employed people in the UK, representing 14% of the workforce. This is not a peripheral group, this is a significant pillar of our economy.”
In conclusion he added: “IPSE has been calling strongly for a comprehensive review for some time now. The review should be chaired by an independent expert, and should make recommendations aimed at making simplifications for taxpayers.”
Therefore what is now clear is that a wave of publicity will arise around the BBC and this issue. How the BBC manage the situation remains to be seen.