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Is an IR35 settlement on the cards for BBC presenters?

Is an IR35 settlement on the cards for BBC presenters?

The BBC hopes to reach a settlement with HMRC for presenters facing retrospective tax bills.

Historically, hundreds of TV and news presenters were engaged by the BBC through their own personal service companies (PSC). For the presenters in question, this contractual arrangement was highly beneficial, not least from a tax perspective.

However, HMRC has since said that IR35 applies to these engagements and presenters must repay what they owe. Former BBC Look North presenter Christa Ackroyd now faces the prospect of retrospective tax bill of over £419,000.

So far, the BBC has not taken responsibility for the unpaid tax. However, last week it said it is “pursuing discussions” with HMRC to reach a solution.

A solution for all

“We have decided to go to HMRC and have conversations about whether we could look to come to an arrangement with them to deal with the cases of individuals in a bulk sense. This is so we are not spending time going to tribunals and so on in the coming years. Those conversations are going on at the moment,” Lord Hall, director general of the BBC, said in an evidence session to the government’s Digital, Culture, Media and Sport Committee last week.

The board asked whether the BBC will consider compensating workers if it is found to have forced them into operating through PSCs.

Who will pay?

Currently, the BBC said it is dealing with historic tax liabilities on a case-by-case basis. In March, the corporation confirmed it is working with the Centre for Effective Dispute Resolution. This is to assess whether it is appropriate or reasonable to make any contribution towards historic demands for Employers NICs. The results are yet to be published.

However, BBC bosses are hopeful they can reach a resolution with HMRC first.

“Our objective is to try to resolve that with HMRC so that we can deal with it in one go rather than people having to go to tribunal, establish a liability, then come to us and go through a long process to establish who – to use your phrase – is culpable for what,” deputy director Anne Bulford said. “We may need to do that. I very much hope that we don’t.”

Radio presenters also liable

The BBC said it knew how the IR35 tax reforms would impact its TV presenters. It has subsequently stated that it didn’t realise workers in radio would be targeted too.

“We knew changes were coming but we thought they were limited changes for some individuals in television and news,” Lord Hall said. “What we did not know was that HMRC was going to overturn what was then an agreed test in the radio industry and suddenly start examining and put a new test in for 3,000-plus people, individuals, who were working in radio. That happened very, very rapidly.”

In response to criticism from the board over concerns about the BBC’s governance structure and inability to deal with issues proactively, Lord Hall added: “When HMRC changed the Radio Industry Guidelines last year, again we were very proactive in getting on top of this issue. What I would say is that I do not think any of us expected them to include radio people who had been covered by the Radio Industry Guidelines. That was 3,000 people, a lot of whom, as you heard from some colleagues in March, are in local radio, not on high incomes.”