HMRC’s IR35 public sector tax reform introduced in April last year had caught a lot of people off-guard, including BBC presenters. Many presenters faced grave financial difficulties after they were caught inside the tax legislation.
Reports have emerged that the BBC has made advances/loans to presenters who had suffered financial problems after they were deemed inside the IR35 legislation. According to an article published in the Telegraph, Anne Bulford BBC’s deputy director general had informed the Common Public Accounts Committee (PAC) that advances and loans were given to a number of presenters who faced temporary financial problems due to the change in tax status.
The UK IR35 tax reform had made it mandatory for taxes and insurance contributions to be deducted from payroll of independent contractors who serve like a regular employee in public-sector organizations.
The BBC has received a lot of negative criticism lately for not doing anything to ease financial pressure of workers who were caught inside the IR35 reform. The move to make ‘hardship’ payments might be a publicity move to gain positive reviews from the public.
Former BBC presenter, Christa Ackroyd, had lost her appeal to the Tax Tribunal and was left with a tax bill of more than £419,000 for the period 2001 to 2013. However, it was found that she was encouraged by the BBC to offer services through a personal service company.
Moreover, in a Select Committee Hearing regarding treatment of freelancers by the BBC held in March this year, it was revealed that some presenters who were coerced into forming their own companies to offer services had taught about taking their own lives.
The Committee Chair, Damian Collins, MP had written to BBC’s Deputy General to respond to the concerns outlined after the session before 16th May.
HMRC Keeps Quit About Controversies Surrounding IR35
HMRC has not responded to criticism raised against the agency for the unfair treatment of public sector independent contractors. While BBC is at least trying to put things right, HMRC has not replied to concerns raised against the reform despite the fact that the BBC has laid some blame on the tax agency.
Many news and radio presenters at the BBC faced grave financial problems due to changes by the HMRC regarding tax status. The Check of Employment Status for Tax (CEST) tool that is used to determine the tax status of an independent contractor has been criticized for being flawed. Thousands of independent contractors have been wrongly deemed to be inside the IR35 tax reform. It is interesting to see how the HMRC will respond to the growing criticisms regarding the tax reform.