In today’s Times:
Dozens of BBC presenters face being forced to settle substantial tax bills after a tribunal ruled that a news anchor must pay more than £400,000.
Christa Ackroyd, 60, hosted the regional news programme Look North for 12 years and was paid as a contractor through a personal service company to minimise her tax bills.
HMRC argued, however, that from 2006 to 2013 she was effectively a BBC employee and was therefore liable for £419,151 in unpaid income tax and national insurance.
A first-tier tax tribunal yesterday found in favour of HMRC and ordered the presenter to pay the bill. The tribunal judge said: “We do not consider that Ms Ackroyd could fairly be described as being in business on her own account.” The ruling is a blow to other BBC presenters who declared themselves to be self-employed. It was disclosed in 2016 that more than 100 of the corporation’s past and present employees were under investigation for alleged tax avoidance over their use of personal service companies. Presenters for other media organisations are also affected.
The National Union of Journalists has accused the BBC of pressing female presenters to leave staff jobs and become self-employed while allowing male presenters to remain on contract.
In his ruling, Judge Jonathan Cannan said that Ms Ackroyd’s appeal did not set a precedent. He noted, however, that it was “one of a number of other appeals involving television presenters and personal service companies”. It is the first ruling for some time in the media sector related to IR35, the tax legislation covering off-payroll working. Other presenters are now expected to settle their cases rather than risk the cost of defeat.
Judge Cannan accepted Ms Ackroyd’s evidence that the BBC suggested that she be paid through a personal service company after poaching her from Calendar, the ITV rival. Her accountant advised that the arrangement was in order.
The tribunal found that she was not self-employed, because she was obliged to work at least 225 days a year and the BBC had the right to specify what services her private company would provide. Under tax rules a person is selfemployed if they can decide what work they do and when.
An HMRC spokesman said: “Employment status is never a matter of choice; it is always dictated by the facts and when the wrong tax is being paid we put things right.” Many freelance BBC presenters have been moved on to staff contracts after rules were changed last year to make the corporation responsible for deciding their tax status.
A BBC spokesman said: “The use of personal service companies is entirely legitimate and common practice across the industry as it provides flexibility for both individuals and organisations. An independent review conducted in 2012 found that there was no evidence that the BBC had attempted to avoid income tax or NIC by contracting in this way.”
Ms Ackroyd left the BBC in 2013 amid a dispute about her tax situation. She said in a statement: “I am delighted that the judge has recognised that I have never acted in any way dishonestly. HMRC and the judge stressed they do not regard me as a ‘tax cheat’ nor have I ever sought to avoid or evade tax.”
She added that the £419,151 figure did not take into account corporation tax she had already paid through her personal service company. She is considering an appeal.
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