Update on HMRC discussions

We’ve always sought to act within the established guidelines but this is a complex area. Several years ago we worked with HMRC and Deloitte to design a new test for television to determine people’s tax employment status, and we have followed industry-wide guidelines for those working in radio for many years.

However, HMRC’s latest assessment tool, launched in 2017, has produced a different tax employment status for many presenters. It is investigating presenters over historic tax and National Insurance which it believes may be due. This is an issue that we are addressing but is obviously one which is not unique to the BBC and affects other broadcasters and media organisations.

For some time, we have been working with our presenters and HMRC to try to resolve these issues. We fully understand and regret the stress this has put people under. We want to find an effective way to put this right as quickly as possible.

We have acknowledged that many years ago the BBC introduced a policy of engaging certain freelance presenters through PSCs. We believe it’s right we bear some of the cost of the uncertainty around employment status misclassification for affected presenters, while fulfilling our responsibility to ensure value for money for the licence fee payers.

Our approach therefore is:

• We continue to try to seek an overall settlement with HMRC to provide certainty about the tax treatment of BBC fees paid to presenters.
• We have put in place a set of principles we intend to use to ensure fairness and consistency in how we calculate our contribution to any outstanding amounts sought by HMRC. These would apply either to an overall settlement with HMRC or resolving individual cases where presenters are being investigated. This will include covering the difference between the PAYE and National Insurance contributions due from the PSC on BBC income under IR35 and the corporation tax payable by the PSC and dividend tax payable by the shareholders of the PSC on BBC income. It will not cover any income tax the PSC has yet to pay out on BBC fees as a result of its own tax planning.
• We have put in place access to support and advice for those affected. The BBC has also noted the findings of recent tribunals. Some presenters may prefer to appeal any HMRC finding against them, and if they choose to do so we will discuss this with them.

These are obviously complex issues. We want to help resolve them as quickly as possible and in a way which is fair to the individuals involved, to the HMRC and to licence fee payers.

BBC Press Office