HM Revenue & Customs (HMRC) has turned the spotlight on more than 100 BBC news presenters and staff who are accused of tax avoidance.
The tax investigation centres on allegations that they set up and misused personal service companies, wrongly claiming they were self-employed, in order to minimise the amount of tax they had to pay.
In July, the BBC transferred 85 presenters onto its payroll as full-time employees following a report that revealed it had paid 124 celebrities more than £150,000 each a year, using personal service companies (PSC).
A First Tier Tax Tribunal hearing heard that HMRC had carried out a tax investigation involving 23 BBC presenters to establish whether they had breached IR35 rules, which are used to decide whether workers should be taxed as employees, or are self-employed.
The latest presenters to have been named are Tim Willcox and Joanna Gosling who have been found by the Tax Tribunal to have paid insufficient tax during years in which they claimed they were not employed by the BBC but were instead paid using a PSC. The pair are currently appealing against HMRC’s ruling.
The BBC, which failed in an application to give evidence in the case, said in its submission: “HMRC have indicated to the BBC that there are around 100 additional cases under consideration involving current or former BBC presenters.
“The BBC also understands that HMRC has initiated or indicated their intention to initiate IR35 proceedings in relation to presenters who are engaged by other broadcasting organisations.
“The appeals are therefore extremely important not only to the individuals in question but also to the BBC and to the broadcasting industry as a whole. The appeals are likely to be the first cases to test the freelance model in the broadcasting industry against the IR35 legislation.”
Dr Anjulika Salhan, a director and tax investigation specialist with Salhan Accountants said: “HMRC has made no secret of its intention to crack down on tax avoidance relating to freelancers.
“The legislation, often referred to as IR35, which was introduced in 2000, aims to tackle ‘disguised employment’. It requires individuals working through an intermediary to pay broadly the same tax and National Insurance Contributions (NICs) as any other employee, where they would have been providing the same services directly.
“This mainly refers to personal service companies, which are enterprises where people provide their services, usually through their own company.
“HMRC has stated that there is a “growing body of evidence which suggests there is significant non-compliance with the current rules.”
“IR35 legislation can be quite complex and can add an additional burden to the running of your businesses, while you are trying to focus on building a reputation and deal with your clients’ requirements so it is best to seek professional help.
“Those who take on employees from a PSC also need to be aware of requirements to comply with IR35 rules.”
If you would like help with IR35 legislation or you are the subject of a tax investigation, please contact us
