BBC presenters face HRMC tax investigation.

[AmexRuislip]

About 100 BBC presenters are being investigated over whether they paid too little tax by working as freelancers, not staff, legal documents have shown.
HMRC is examining 100 figures who were paid via personal service companies.
A tribunal ruling in a case involving BBC News presenters Tim Willcox and Joanna Gosling revealed HMRC has opened enquiries into 100 other on-air stars.
The BBC said the tribunal related to between 2006 and early 2013, when it adopted a new employment status test.
The case relates to whether Willcox and Gosling were eligible to be paid as freelancers through their own personal services companies under legislation known as IR35, rather than as employees.
The pair have appealed against the extra tax and National Insurance contributions which HMRC decided were due. According to the ruling, both became staff in 2014. The pair are not commenting.
Their appeal, according to the tribunal's ruling, is being treated by the BBC as a de facto test case.
The HMRC has examined a list of 469 current or former presenters who have peen paid via personal service companies and put around 100 cases "under consideration", according to a BBC application to the First-Tier Tribunal.
The BBC's application, which was quoted in the judgement, continued: "The BBC also understands that HMRC has initiated or indicated their intention to initiate IR35 proceedings in relation to presenters who are engaged by other broadcasting organisations…
"The appeals are therefore extremely important not only to the individuals in question but also to the BBC and to the broadcasting industry as a whole.
"The appeals are likely to be the first cases to test the freelance model in the broadcasting industry against the IR35 legislation."
An HMRC spokesperson said employment status is "never a matter of personal choice and is always dictated by the specific facts".
The spokesperson continued: "When the employment relationship does not accurately reflect the underlying reality of the relationship, the wrong tax is paid then we intervene to ensure the rules apply as parliament intended.
"While there can be many legitimate business reasons for workers being employed through their own companies, there are rules in place enabling HMRC to make sure people who provide their services in this way pay the right tax and National Insurance."
A BBC statement said it was "an industry-wide issue and affects those who have been engaged in this way for a number of different organisations".
The statement added: "The exact number of cases that will be taken forward will be determined by HMRC. This particular tribunal relates to tax issues between 2006 and early 2013 and not the present day.
"It is up to individuals to ensure they pay the right tax, and since 2013, the BBC has adopted a new employment status test that provides a clear and consistent approach to the employment status of journalists and presenters."
The BBC announced in 2012 that it would give up to 131 freelancers staff contracts after a review of the use of personal service companies.

http://www.bbc.co.uk/news/entertainment-arts-37591366

 

[Gwylan]

An HMRC spokesperson said employment status is "never a matter of personal choice and is always dictated by the specific facts". The spokesperson continued: "When the employment relationship does not accurately reflect the underlying reality of the relationship, the wrong tax is paid then we intervene to ensure the rules apply as parliament intended. While there can be many legitimate business reasons for workers being employed through their own companies, there are rules in place enabling HMRC to make sure people who provide their services in this way pay the right tax and National Insurance.

This is interesting for me as I have a similar situation except, in my case, it wasn't what I wanted. The company I was working for insisted that I went self-employed even though I was working full-time. The advantage for me was that I worked from home and when I went to the office - once a fortnight - I could offset expenses. But I had a desk and an office phone number so it was very dodgy and HMRC aren't happy.

I had a bit of a barney about it but because it wasn't my choice, it's my employer they're investigating.

 

[AmexRuislip]

This is interesting for me as I have a similar situation except, in my case, it wasn't what I wanted. The company I was working for insisted that I went self-employed even though I was working full-time. The advantage for me was that I worked from home and when I went to the office - once a fortnight - I could offset expenses. But I had a desk and an office phone number so it was very dodgy and HMRC aren't happy.

I had a bit of a barney about it but because it wasn't my choice, it's my employer they're investigating.

I hope you get things sorted out, as arguments with the tax office can become quite stressful.

 

[Gwylan]

I hope you get things sorted out, as arguments with the tax office can become quite stressful.

My accountant had the argument - it seems to have worked out OK

 

[El Presidente]

Sky and ITV have similar arrangements.


Sent from my iPhone using Tapatalk

 

[Bozza]

Wouldn't it depend on how the individuals dealt with their own tax affairs after being paid by the BBC?

If their own companies paid them the full monies received from the BBC as salary they'd be paying the appropriate amount of tax and NI wouldn't they?

If, however, they were paying themselves minimal salaries and the rest in tax efficient dividends, then to all intents and purposes they were cheating and deserve all they get.

 

[BHAPFC]

Hi [MENTION=6886]Bozza[/MENTION] - any chance with some help with our crowdfunding campaign for our European Champions League games please? (see PM and thread running) Thanks

 

[beorhthelm]

Wouldn't it depend on how the individuals dealt with their own tax affairs after being paid by the BBC?

If their own companies paid them the full monies received from the BBC as salary they'd be paying the appropriate amount of tax and NI wouldn't they?

If, however, they were paying themselves minimal salaries and the rest in tax efficient dividends, then to all intents and purposes they were cheating and deserve all they get.

its down to whether they are genuinely freelance, or where effectively being employed full time by the BBC. i dont think HMRC even care if the services company vehicle paid enough, its whether the employer paid the tax.

 

[AmexRuislip]

Joanna Gosling was the wife of former Cameron spin doctor, Craig Oliver.
A 2012 Daily Mirror report on her special tax arrangements.

http://www.mirror.co.uk/news/uk-news/david-camerons-spin-doctor-craig-940272

 

[Guinness Boy]

Sky and ITV have similar arrangements.


Sent from my iPhone using Tapatalk

As do countless other organisations in countless other sectors. It's always good to get a dig in at the Beeb though.

People seem unable to separate the institution that is mostly necessary with the people associated with it who are mostly flawed, like more or less every individual human being. Thus Savile abusing hundreds becomes a problem with the BBC's governance rather than his repulsive individual conduct. Thus people making these sorts of tax arrangements, ones that occur throughout the media and IT become an issue of the BBC's governance rather than the individual's financial arrangements. Never mind that it goes on everywhere, it's occurring at somewhere WE pay for (feel free to pull an outraged face here).

We pay for it because it's genuinely neutral. Because it can't be bought by commerce. Because it produces everything from Final Score to Question Time to Today to CBeebies to an app that I use to track our away games all for a couple of quid a week.

But because it's part of the "liberal elite" being targeted by the leader of an institution with a frankly horrific recent track record on financial impropriety it's fair game.

Welcome to 2016.

 

[Rowdey]

Joanna Gosling was the wife of former Cameron spin doctor, Craig Oliver.
A 2012 Daily Mirror report on her special tax arrangements.

http://www.mirror.co.uk/news/uk-news/david-camerons-spin-doctor-craig-940272

Chris Lunn from East Grinstead is mentioned in that report; he recently got jailed and had over 7000 clients, mostly TV/media related including Talkback, and Fiona Bruce, and the odd builder, like me.

Amongst a few other things, they didnt like that he was advising to run T/As partnership's alongside a Limited Co to lessen liabilities.

He went from someone who used to advise HMRC on policy to being hounded by them, and eventually they got him.

Now they're chasing everyone... 10 years of disclosure Mr HMRC, sure thing..

 

[skipper734]

This is a non story. It's happened to me twice going back to the late seventies. Just shuffling the goalposts around.

 

[AmexRuislip]

Chris Lunn from East Grinstead is mentioned in that report; he recently got jailed

Just read this report.

http://www.dailymail.co.uk/news/art...barrister-claims-held-responsible-65-000.html

 

[GT49er]

There are very (well, fairly) clear rules on what is and what is not self-employment. Unfortunately there is little or no enforcement. One of my children had a job 'on a self-employed basis'; it clearly wasn't, and she wasn't happy about it. I took the case to both the DWP and HMRC. Both agreed that it didn't comply with the regulations for self-employment. So what is the next step, I asked. The answer was, 'Your daughter should take it up with her employer'. Yes, but what will the DWP/HMRC do if the employer isn't interested? Basically, nothing - the employee could go to law, a tribunal, whatever. Here's the form for her to fill it to pay tax as a self employed person.
To be fair, the reason they're not interested in enforcing the rules is that they say they just haven't got enough people to do the job - which is probably not far from the truth.

 

[NooBHA]

Wouldn't it depend on how the individuals dealt with their own tax affairs after being paid by the BBC?

If their own companies paid them the full monies received from the BBC as salary they'd be paying the appropriate amount of tax and NI wouldn't they?

If, however, they were paying themselves minimal salaries and the rest in tax efficient dividends, then to all intents and purposes they were cheating and deserve all they get.

These cases are not actually against the individuals. They are against the BBC ''Under IR35 Regulations'' and if the BBC lose then it will be they who need to meet the shortfall in tax if the courts find that the they should have been paid as employees.

A lot of people thought HMRC would not take these cases to the courts but now that they are, if HMRC win it could really have far reaching consequences for almost every ''Owner managed company'' in the country.

I actually think that HMRC could lose this in the courts but it will depend on the circumstances of the individuals involved and what their jobs involved and how their contracts were drawn up and the terminology ''Master/Servant'' relationship between the BBC and individuals.

If it is found that the BBC could dictate where, when and their tools are used to perform the duties. And if the individuals had no say in any of these points then they would be deemed ''servant'' in a ''Master / Servant'' relationship.

If this was the case then they should have been paid and taxed as an employee and not through their companies.

I suspect that HMRC have ''cherry picked'' which cases to take to Tribunal through the courts to give themselves the best chance of winning.

Normally I would want HMRC to win these cases because a lot of rich people are exploiting this; however as it could be far reaching to the ''small taxpayer'' as well then I am not really sure who I want to win this case.

Many small taxpayers have recently been forced to adopt an ''owner managed company'' for themselves because their employers are trying to get round ''pension payment matching'' regulations and they would be badly affected if HMRC win this case because there would be a knock on affect to them.

 

[GT49er]

I actually think that HMRC could lose this in the courts but it will depend on the circumstances of the individuals involved and what their jobs involved and how their contracts were drawn up and the terminology ''Master/Servant'' relationship between the BBC and individuals.

If it is found that the BBC could dictate where, when and their tools are used to perform the duties. And if the individuals had no say in any of these points then they would be deemed ''servant'' in a ''Master / Servant'' relationship.

If this was the case then they should have been paid and taxed as an employee and not through their companies.

I suspect that HMRC have ''cherry picked'' which cases to take to Tribunal through the courts to give themselves the best chance of winning.

This in spades, and with knobs on! Most of the time, they just don't bother, and give the employee a self-employment form to fill in.

 

[NooBHA]

There are very (well, fairly) clear rules on what is and what is not self-employment. Unfortunately there is little or no enforcement. One of my children had a job 'on a self-employed basis'; it clearly wasn't, and she wasn't happy about it. I took the case to both the DWP and HMRC. Both agreed that it didn't comply with the regulations for self-employment. So what is the next step, I asked. The answer was, 'Your daughter should take it up with her employer'. Yes, but what will the DWP/HMRC do if the employer isn't interested? Basically, nothing - the employee could go to law, a tribunal, whatever. Here's the form for her to fill it to pay tax as a self employed person.
To be fair, the reason they're not interested in enforcing the rules is that they say they just haven't got enough people to do the job - which is probably not far from the truth.

Actually , although there are written rules on this. The interpretation of the written law is often interpreted differently for ''tax avoidance purposes''

HMRC don't take action because they do not have ''court legislation'' on their side just yet. If they win these cases then they will have legislation on their side. Se my other post on this. I am not sure I want HMRC to win this one because many small every day employees could be affected because often they freelance to different larger employers and businesses.

If HMRC win they could force the Larger Employer/Contractor to deduct NIC at source. The small business who often have cash flow problems. This could force them out of business if they cannot afford to buy materials for their next job or contract. - It really could be a nightmare for small business if HMRC win this one

 

[GT49er]

Actually , although there are written rules on this. The interpretation of the written law is often interpreted differently for ''tax avoidance purposes''

HMRC don't take action because they do not have ''court legislation'' on their side just yet. If they win these cases then they will have legislation on their side. Se my other post on this. I am not sure I want HMRC to win this one because many small every day employees could be affected because often they freelance to different larger employers and businesses.

If HMRC win they could force the Larger Employer/Contractor to deduct NIC at source. The small business who often have cash flow problems. This could force them out of business if they cannot afford to buy materials for their next job or contract. - It really could be a nightmare for small business if HMRC win this one

My comments were not about employees wanting to work as self-employed. What doesn't get enforced (and should) is employers employing people desperate for work on a 'self-employed basis' to avoid setting up PAYE and paying NI contributions.

 

[NooBHA]

My comments were not about employees wanting to work as self-employed. What doesn't get enforced (and should) is employers employing people desperate for work on a 'self-employed basis' to avoid setting up PAYE and paying NI contributions.

I agree and noticed that but see last 2 lines of my post before that as below. If they win these cases they will in time start to get on top of those employers as well. They need Legislation behind them to go after those employers. Hence taking cases to Tribunals to obtain Rulings from the courts.

'' Many small taxpayers have recently been forced to adopt an ''owner managed company'' for themselves because their employers are trying to get round ''pension payment matching'' regulations and they would be badly affected if HMRC win this case because there would be a knock on affect to them. ''

 

[GT49er]

I agree and noticed that but see last 2 lines of my post before that as below. If they win these cases they will in time start to get on top of those employers as well. They need Legislation behind them to go after those employers. Hence taking cases to Tribunals to obtain Rulings from the courts.

'' Many small taxpayers have recently been forced to adopt an ''owner managed company'' for themselves because their employers are trying to get round ''pension payment matching'' regulations and they would be badly affected if HMRC win this case because there would be a knock on affect to them. ''

Yes, so the sooner the HMRC do put a stop to employers forcing employees to go along with 'self-employed status' the better. Puzzled me as to why you wouldn't want them to succeed.