BBC ‘bullied presenters into becoming PSCs'

“Compelled,” “coerced” and “bullied” – words that presenters at the BBC gave yesterday to describe how the BBC more than just “encouraged” them into Personal Service Companies.

To prove their claims to MPs, the presenters shared BBC-authored memos ‘not threatening but leaving no other choice’ than to use a PSC, summed up BBC World anchor Kirsty Lang.

“For the avoidance of doubt,” the BBC wrote in 2011 to radio presenter Stuart Linnell, “if any future contracts [of yours] are renewed…you’ll be required to have a limited company”.

Similarly, DJ Liz Kershaw shared that she was told by the BBC, also in writing: “We can only offer [you] the…role via a company or partnership. We cannot agree to any exceptions”.

The tone in which the BBC communicated what it describes in its emails and letters as its “policy” of PSCs for presenters varies. And not just in the broadcaster’s written edicts.

'Bullied'

He did not face the MPs yesterday on the Digital, Culture, Media and Sport select committee, but one BBC presenter implied that the reminder he received was coercive.

“I was bullied into creating a PSC”, alleged the presenter, who messaged Moneybox and Radio 4 presenter Paul Lewis, and who did attend the evidence session, during the hearing.

Lewis then said that it was “shaming” that press stories covering the BBC’s use of PSCs were now having to be accompanied by notices for those affected to phone the Samaritans.

It’s due to an anonymous account -- submitted to the MPs -- by a BBC radio host who says the stress of potentially having to appear in court due to IR35 led her to attempt suicide.

Her statement says: “I have always loved working for the BBC but the way they have behaved has reduced me to more than tears. It’s one of the factors that three days ago took me into my loft where I tried to hang myself.”

'Dreadful circumstances'

These are some of the “dreadful circumstances” that Lewis touched on to the MPs, extending to stories of mental breakdown by some of the now 184-strong BBC presenter WhatsApp group.

BBC’s Oxford Charles Nove is among the few willing to be named, as in a dossier of mostly anonymised presenters’ experiences he says is “constantly worried” of becoming homeless due to the prospect of a tax bill under IR35 that he cannot afford to pay.

Damien Collins MP says all the evidence from the BBC presenters is “highly disturbing.”

As chair of the committee, he also spoke yesterday of the BBC’s behaviour being “well below” par for the public broadcaster, saying it was more befitting of a “rogue corporation.”

Just before his DCMS committee convened for the morning session however, and even pre-empting the dossier featuring the account of the BBC host who tried to kill herself, the BBC took action.

In a statement which all the committee’s witnesses including the final witness Jolyon Maugham QC, seemed to back for its more considerate tone, the BBC said it would take three unprecedented steps.

'BBC bears some liability'

First, it will set up a “fair and independent process” under the supervision of the Centre for Effective Dispute Resolution.

The CEDR will determine “the right approach” in cases where presenters “believe the BBC bears some liability in relation to demands for Employers’ National Insurance Contributions.”

This radical, conciliatory move by the BBC is accompanied by the second step – agreeing with the auditor of the National Audit Office to keep him fully informed of the BBC reviewing its stance on PSCs, and supporting any audits he may wish to run.

And thirdly, the BBC will invite other broadcasters to create together “an industry-wide approach”, to reflect “HMRC’s approach to taxation in the media” having evolved, the corporation claims.

The latter appears to allude to an apparent agreement in 2004 that the presenters believe the BBC struck with HMRC, on the set-up and status of BBC talent.

'Implausible, impossible'

Broadly, the presenters claim the BBC told them that HMRC stipulated to it that self-employed, sole trader presenters were no longer permitted, and that PSCs were the only viable alternative.

“The notion that the BBC could have received a directive from HMRC to engage people through PSCs strikes me as being implausible, to the point of impossible,” a disbelieving Mr Maugham, of Deveraux Chambers told the MPs in his evidence session.

He explained: “HMRC has no incentive to seek to secure that those who are self-employed are engaged through PSCs. If anything, HMRC has an incentive to secure that those who are self-employed are engaged directly.”

'Treating yourself as self-employed'

However, the barrister’s more controversial submission indicates that BBC presenters fearing liabilities under IR35 only have that fear because of how they decided to pay themselves (on receipt of an accountant’s advice or not).

“The fact of interposing a personal services company doesn’t creative a tax problem,” he said. “What creates a tax problem is interposing a personal service company and then treating yourself as self-employed.

“So the fact that the BBC insisted on personal service companies being used here is not -- of itself, what led to the difficulties that individuals [BBC presenters] now face.”

Mr Maugham enforced: “What led to those difficulties is the fact that they then treated themselves as self-employed. They could have taken all of the money that was paid to the[ir] PSC; paid themselves all of that money, as employees, and they would not now face any tax difficulty at all.”

Seb Maley, chief executive of IR35 advisory Qdos Contractor confirmed to ContractorUK: "Obviously, if the presenters had paid themselves as inside IR35 then there would be no liability.

"By declaring yourself inside IR35 you are not only responsible for paying employee taxes and NIC, but also the employers’ NIC that would have been due from the engager, [in this case] the BBC."

'Poorly advised'

Towards the end of his evidence, the Deveraux Chambers QC reiterated: “It is always open to someone who is paid through a personal service company to treat themselves as an employee of that PSC, and pay themselves on PAYE all of the money that the PSC receives.

“And if they do that, they don’t now have a tax problem. So the question that’s in my mind is ‘Well, why does that not happen?’ And the answer, I suggest, is that it’s because people were poorly advised.”

Speaking after the hearing, the Freelancer & Contractor Services Association seemed to agree.

Chief executive Julia Kermode said: “The BBC presenters were allegedly told to set up their own limited company, making the presenters directors of their company, which brings with it certain legal responsibilities as per any company director role.

“[But the case also] illustrates that good advice on IR35 status is critical and I fear that the BBC presenters did not get good advice and, in the eyes of the law, are ultimately responsible for their own tax affairs, even if they were unfairly coerced into a certain arrangement.”

'Dangers'

Rather than the suggested safety net for PSC directors of making ‘inside-IR35’ payments (also known as ‘deemed payments’), IPSE said the main takeaway from the hearing was actually for the government.

The contractor body said afterwards: “Evidence presented at the Digital, Culture, Media and Sport Committee today by BBC presenters should be a wake-up call to the government about the dangers of rolling out the deeply flawed changes to IR35 to the private sector.”