Tax expert aghast at BBC 'payoff cash' for IR35 bills

An advisory for contractors in tax disputes has reacted disapprovingly to reports that the BBC is set to all but pay off its presenters’ IR35 bills, following a collapse in its talks with HMRC.

WTT Consulting, which has previously criticised HMRC for letting the BBC try to settle all presenters’ bills in one go, sounded aghast that the public-funded broadcaster is to pay a reported two-thirds of the money that such individuals owe under IR35.

“How dare they use my money to subsidise the tax bills of ‘stars’?” asked the advisory’s Graham Webber, referring to some of the reported 800 presenters due to receive the cash likely being high-profile, well-paid presenters.

All of the 800 were reported on Friday as being those individuals at the BBC who were left no choice but to become a PSC (if they wanted to keep their jobs), down significantly from an estimate of 3,000 by BBC director-general Lord Hall.

Almost regardless of number, Mr Webber has asked whether it is fair that the presenters; fair to non-BBC PSC contractors with IR35 bills, and fair to other engagers whose workforce has IR35 demands, that they receive “unprecedented” favouritism from HMRC.   

On Friday, he also asked: “[Should the] BBC…make payments to the 800 or so people they ‘forced’ into PSCs and who are now being pursued as being inside IR35…does that set precedent for civil service engagers or other public sector providers?”

In other words, just as the BBC got to talk to the taxman over its workforce’s IR35 liabilities, and now gets to pay towards them as those talks have reportedly broken down, WTT Consulting wonders if the likes of the NHS and Network Rail will be entitled to the same.

Comments made by HMRC’s second permanent secretary, Jim Harra, indicated last month that at least the initial stage of talking to the Revenue about historic IR35 bills would be open to ‘other engagers.’

In the case of the BBC, because those talks have proved unsuccessful so far, the corporation’s board members have reportedly signalled using licence fee funds to help settle the IR35 bills facing the 800.

The payments were said to effectively be the difference between the tax which the presenters would have paid had they remained on-payroll, and what they would have paid in corporation tax.  

However, apparently inspired by Lorraine Kelly’s IR35 victory, the board is understood to be keen for presenters who feel they are outside IR35 to take HMRC to tribunal, whereby the BBC’s cash would be a type of insurance in the event they lose.

Mr Webber pointed out that, almost regardless of when the IR35-support payments from the BBC to affected workers are made, “presumably the payments are taxable”, indicating that some presenters might end up with less payoff cash than they expect.

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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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