BBC launches crackdown on personal service companies

The BBC’s much-anticipated employment test will this week be run on the corporation’s highest profile and lesser known freelance professionals alike, in a move to clampdown on personal service companies (PSCs).

The test, promised a year ago amid disapproval at the BBC’s use of PSCs, will involve an assessment of how much editorial ‘control’ the broadcaster has over the freelance worker’s activities, the bulk of which are expected to be on-air.

Presenters and newsreaders who emerge to be under a “significant” amount of BBC control will be asked to join the payroll where they will be taxed at source, instead of continuing with their PSC, which allows them to deduce tax and national insurance themselves.

In a news item detailing the assessment, the BBC added that it cannot gauge how many ‘to-camera’ freelancers will be affected because it will be run on a “a case-by-case basis”, but the BBC’s top talent, such as Jeremy Paxman and Fiona Bruce, are likely to be within scope.

The BBC also reported that while its on-air freelancers who work short term will likely still be classified as self-employed, so-called ‘off air’ freelancers are already undergoing the test to establish if their use of PSCs is appropriate.

To that end, the corporation estimates that approximately one fifth of its 16,000 production freelancers who currently operate through their own limited companies could be asked to join the payroll as BBC employees. If they decline, they could face the axe.

The BBC’s moves against its freelance talent have disappointed the PCG, the trade group for freelancers, which has pointed out that existing tax rules, such as IR35, are already in place to distinguish between employed and self-employed.

“If there are concerns about tax, it is the tax system that should be reformed, not the way these experts are working,” said the group.

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

Meanwhile, despite “no evidence” being found last November that the BBC used PSCs to help aid tax avoidance, the organisation said the new employment test was its response to the Public Accounts Committee concluding that “too many” BBC staff use PSCs, which could allow them to pay less tax.

Editor’s Note: Further Reading on ‘Control’ in determining employment status -
IR35: Substitution, Control and MOO

Contractors’ Questions: Are client changes to my work an IR35 pointer?

Contractors’ Questions: Can a lack of control save me from IR35?

IT contractor JLJ in first ever ‘split IR35 case’



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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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