A review into the BBC’s freelance contracting arrangements has found the BBC’s current policy for contracting staff is inconsistent - with on-air talent engaged as staff, self-employed or via a personal service company, and often doing very similar work – and as a result the broadcaster is making changes to its freelance policy.
Commissioned following the Government’s Alexander Review of tax paid senior public appointees and the BBC’s appearance before the Public Accounts Committee in July 2012, the review, conducted by Deloitte LLP and the BBC’s own internal audit department, covers all on-air and off-air individuals contracted and paid in the financial year 2011/12.
The review showed: the BBC has a high standard of tax compliance and there is no evidence that the BBC uses personal service companies to aid income tax or National Insurance Contribution avoidance, retaining a freelance model is crucial to the success of the broadcaster though the current policy is inconsistent, and the BBC wishes to address the public perception that off-payroll contracts, in particular service companies, are used to avoid tax.
The broadcaster has since announced that it will make a series of changes to its freelance contracts following this review moving away from engaging on-air talent on long-term contracts as personal service companies.
More objective and specific employment tests are to be introduced at the BBC, with freelancers offered a staff contact when appropriate. The broadcaster has also committed to working directly with HMRC to develop new objectives for the tax treatment of on-air TV and radio presenters, as currently none exist.
Zarin Patel, chief financial officer at the BBC, commented: “Our review shows the BBC is not using personal service companies to avoid tax or help others avoid tax. Nevertheless, it shows inconsistencies in the way our policy has been applied.
“We are addressing this with a more objective employment test for all new contracts and by developing a new framework with HMRC for self-employed on-air presenters.”
The BBC plans to implement these changes at the start of the next financial year, April 2013.