Select committee inquiry
The BBC’s engagement with personal service companies inquiry
Closed
What the inquiry looked at
“Scope of the inquiry The BBC hires thousands of freelancers every year: in 2017/18, it hired 60,000 freelancers, which included actors, presenters and camera operators. For freelance roles, individuals can be contracted through personal service companies (PSCs): a limited company that typically has a sole director who owns most shares and provides services to clients via a contract. In 2017/18, the BBC had contracts with 5,145 PSCs, on which it spent a total of £84m. PSCs can pose a risk to the Exchequer: In the late 1990s the government became concerned that some people were using PSCs to avoid paying the correct amount of tax. This is because there are different tax regimes for personal and business income. Legislation called IR35, via the Finance Act 2000, aimed to address this risk, seeking to ensure that people who work in the same manner pay broadly similar amounts of income tax and national insurance. However, a central part of IR35 was that the PSC had to assess their own employment status for tax purposes. This carried the risk of associated tax liabilities/debt as a result of misclassification. In April 2017, the government reformed the system so that public bodies, such as the BBC, became responsible for determining the employment status for tax purposes of all those it hired through PSCs. A National Audit Office (NAO) investigation has found that, in many cases, the BBC’s application of HMRC’s employment status assessment test generated a different status for tax purposes compared to the BBC’s own assessment test. In its assessment of 663 on-air freelancers, 92% were deemed to be “employed for tax purposes determination” using HMRC’s tool, whereas the BBC had assessed the majority as self-employed. Between April and September 2017, the BBC paid £8.3m of tax to HMRC to avoid any penalty charges for not paying tax that was potentially due. Although it is starting to recoup this money once it is certain about an individual’s employment status, it is still to recoup £2.9m because of concerns raised by individuals. The NAO report also found that the BBC’s implementation of these changes has created difficult relationships with some of its staff: 170 have publicly expressed concerns with the employment status given to them by the BBC. Individuals have said that they only started operating through PSCs because the BBC required them to do so if they were to receive work and they feel they have received misleading or limited information from the BBC. By May 2018, the BBC estimated that some 800 staff, 300 of whom were hired through PSCs, warranted further review because they were at risk of being challenged by HMRC. According to HMRC, as of October 2018 there were approximately 100 open investigations into BBC-related PSCs. The Public Accounts Committee first addressed the BBC's use of PSCs in 2012 as part of a wider inquiry into off-payroll working across the public sector. In this new inquiry, the Committee will consider the BBC’s use of PSCs, why issues have arisen, how the BBC has managed its use of PSCs, as well as steps it is taking to help affected individuals. The Committee will also question the BBC about its programme to replace and enlarge the EastEnders set and improve infrastructure at the BBC’s Elstree Centre, which, according to a recent NAO report, is now forecast to cost £27m more and taken an additional two and half years to complete.”
The committee's words, from the inquiry page on parliament.uk ↗.
What it found
In the committee's words, from the summary of 90th Report - BBC and personal service companies ↗
The BBC’s mishandling of its use of personal service companies has caused misery and hardship for those affected and has risked bringing the BBC into disrepute. Its approach has been muddled and chaotic, and its communication with those affected has been unacceptably poor. The BBC has apologised to people affected by its policy changes and its approach to implementing government reforms and is now trying to reach a settlement with HM Revenue & Customs for outstanding tax claims, but this is taking longer than expected. We cautiously welcome the BBC’s commitment to helping those affected, but admitting responsibility after the event is not sufficient without taking effective steps to resolve the situation. The BBC needs to get a better grip of its management of its freelancer workforce if it is to repair its relationship with TV and radio presenters and restore its reputation.
What the government said
No government response is linked to this report.
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 8 February 2018 to 5 April 2019.
- Oral evidence 30 Jan 2019
- Report 5 Apr 2019
- Correspondence 8 Feb 2019
What it recommended 1 recommendation · 16 conclusions
1The BBC’s approach to hiring freelancers has been fractured, chaotic and muddled.
Concluded (the committee's words)
The BBC’s approach to hiring freelancers has been fractured, chaotic and muddled. Since 2000, the BBC has made various changes to its policy towards, and contractual methods used for, hiring freelancers. From 2008, it introduced a policy of only hiring freelance presenters in longer-term or higher value roles through PSCs. HMRC told us that it “had concerns about the tax treatment of some BBC presenters for some considerable time” going back to around 2004. In response to our inquiry into off-payroll working in the public sector in 2012, in November 2013 the BBC adopted a new policy for freelance television and radio news presenters under which it offered those it assessed as employed for tax purposes a new type of on-air talent employment contract. In contrast, its policy for other freelance radio presenters remained unchanged. The implementation of these policy changes has often rested with local managers, resulting in differences in how freelancers are treated. We heard of cases of people working in the same job but hired through different contract structures and consequently paying different amounts of tax and national insurance. There may be justifiable reasons for these differences, but we found no sense of transparency or clarity about the sorts of contracts the BBC put people on. The BBC intends to simplify arrangements by eventually replacing on-air talent contracts with standard staff contracts. Recommendation: The BBC should write to us by June 2019 with clear plans for making the arrangements in this area simpler, clearer and more consistent.
2We are shocked that the BBC is unable to confirm whether its early PSC policy...
Concluded (the committee's words)
We are shocked that the BBC is unable to confirm whether its early PSC policy was discussed at an appropriately senior level. As part of our previous inquiry into off-payroll arrangements in the public sector in 2012, we were concerned that the use of PSCs within government was not subject to sufficient levels of challenge. We are seriously concerned that the BBC cannot provide us with sufficient assurance that its policy changes relating to its historic use of PSCs, affecting a key and operationally important part of the BBC’s workforce, were adequately discussed at a senior management level. The BBC was able to find minutes of executive meetings but there is no evidence that policies and issues relating to PSCs were discussed. The BBC told us that, since the abolition of the BBC Trust in April 2017, the Executive Board and Unitary Board have extensively dealt with PSC policies. Recommendation: The BBC should write to us by June 2019 to set out how it intends to ensure that it will exercise proper governance over key operational changes in the future.
3We find it unacceptable that the BBC did not fully explain to individuals the impact...
Concluded (the committee's words)
We find it unacceptable that the BBC did not fully explain to individuals the impact its PSCs policy would have them. Before 2013, the BBC only hired freelance presenters in longer-term or higher paid roles through a PSC in order to transfer the tax risk, and potential associated costs, from itself to the PSC. This policy required individuals to set up a PSC if they did not already have one. The BBC told affected individuals to seek independent financial advice, but it failed to spell out to them their PSC’s tax responsibilities or the risks they were facing from HMRC if they got their tax payments wrong. There was wide variation in the quality of the conversations held by BBC line managers with those affected and the information that they were provided as a result. From April 2017, the BBC began to do more 6 BBC and personal service companies to explain the impact of the government’s changes to responsibilities for assessing an individual’s employment status, communicating with agents’ groups, running seminars and undertaking presentations. The BBC has admitted some conversations between local line managers and individuals in 2017 were still not good enough, partly due to the unexpected numbers of individuals it had to deal with. Since April 2017, the BBC has used HMRC’s new Check Employment Status for Tax (CEST) tool to assess the status of its freelancers. The BBC and other public sector bodies had significantly less time than the private sector has subsequently been given to prepare for the changes to responsibilities for assessing an individual’s employment status. The BBC told us that results from CEST impacted an unexpected number of people, with 92% of 663 on-air freelancers between August 2017 and June 2018 assessed as ‘employed for tax purposes’. This was in stark contrast to the BBC’s previous assessment in which most on-air freelancers had been deemed as self-employed. It also told us that it had taken steps to improve communications with the individuals concerned, but it could provide no assurance on how successful its actions had been. Recommendation: The BBC should write to us by June 2019 setting out how it will gain assurance that its efforts to improve its communication with affected individuals have been successful. Recommendation: In the same letter, the BBC should also outline how it is monitoring the numbers of people assessed with a particular tax status.
4The BBC has a long way still to go to repair its relationship with those...
Concluded (the committee's words)
The BBC has a long way still to go to repair its relationship with those badly affected by its mismanagement of the changes in responsibility for assessing the tax status of those it hired through PSCs introduced in April 2017. The impact of changes in 2017 in determining the tax status of those hired through PSCs has caused some individuals, who have been loyal to the corporation for many years, great stress and financial hardship. This is partly because the BBC began in August 2017 to deduct on-going income tax and national insurance from the amount they paid individuals, while simultaneously also deducting the amount of tax previously paid in advance by the BBC on their behalf for April to July 2017. Some people are also concerned that they are now more likely to be investigated by HMRC because since April 2017 the BBC has started to treat them as employed for tax purposes when they were treated before this as self-employed. The BBC estimated in May 2018 that 300 individuals hired through PSCs warranted further investigation because their tax status was at risk of being challenged by HMRC. The BBC has recently started to provide some low level financial assistance to individuals paid less than £45,000 a year and has set up a mediation process to handle individual cases. The BBC has paused this process while it seeks to agree, by the end of March 2019, a settlement with HMRC for outstanding tax claims. The BBC has not yet set out how it intends to address the issue of the potential loss of employment benefits in cases where people on staff contracts were forced to become freelancers and set up a PSC. Recommendation: The BBC should write to us as soon as it has reached a settlement with HMRC, providing details of this settlement, or, if such a settlement has not proved possible, details of its plans for resolving individual’s cases. This should also include an update on the status of the mediation process. BBC and personal service companies 7 The BBC should write to us, by June 2019, outlining how it plans to assess the potential loss of employment benefits to individuals, and the progress made so far in the number of people assessed. 8 BBC and personal service companies 1 The BBC’s use of personal service companies
5Since 2000, the BBC has made various changes to its policy and contractual methods used...
Concluded (the committee's words)
Since 2000, the BBC has made various changes to its policy and contractual methods used for hiring freelancers. Between 2000 and 2004, the BBC used HMRC’s media-specific guidance to determine the employment status for tax purposes of freelancers. As the BBC considered the risk of misclassification to be low, it did not have a policy on whether to hire freelance individuals directly as sole-traders or indirectly via PSCs. After HMRC queried the employment status of BBC news presenters in 2004, the BBC offered these 1 C&AG’s Report, Investigation into the BBC’s engagement with personal service companies, Session 2017–19, HC 1677, 15 November 2018 2 C&AG’s Report. paras 2 and 1.6 3 Qq 7 and 9; C&AG’s Report, paras 1 and 2.2 4 C&AG’s Report, para 1.5, Figure 7 5 House of Commons Committee of Public Accounts, Off-payroll arrangements in the public sector, Twelfth Report of Session 2012–13, HC 532, 5 October 2012 BBC and personal service companies 9 people a choice: move onto a staff contract or remain freelance and be hired through a PSC. Then, after an HMRC review in 2007 of the commercial radio industry, from 2008 the BBC introduced a policy of only hiring freelance television and radio presenters in longer-term or higher paid roles through PSCs.6 HMRC told us that it “had concerns about the tax treatment of some BBC presenters for some considerable time” going back to around 2004.7
6In our 2012 report, we expressed concerns that the BBC had no means of ensuring...
Recommended (the committee's words)
In our 2012 report, we expressed concerns that the BBC had no means of ensuring that its freelancers were paying the right amount of tax. The BBC told us that it would be carrying out a detailed review of its off-payroll arrangements, and we recommended that the review should set out how it would gain assurance that these individuals paid the right level of income tax and national insurance on their income. The BBC commissioned Deloitte, and its internal auditors, to carry out this review, which was published in October 2012.8 From November 2013, the BBC applied a new policy for freelance television and radio news presenters using its own employment status test, developed with Deloitte and in liaison with HMRC.9 Under this policy it offered those it assessed as employed for tax purposes, using the test it had developed, a new type of on-air talent staff contract.10 The BBC’s policy for other freelance radio presenters remained unchanged.11
7The BBC accepted that the implementation and communication of its policy changes often rested with...
Concluded (the committee's words)
The BBC accepted that the implementation and communication of its policy changes often rested with its local managers, and that this resulted in differences in how freelancers were treated. We heard of cases of people working in the same job but hired through different contract structures and consequently paying different amounts of tax and national insurance. This was supported by Deloitte’s review, which also found that some freelancers appeared to have the characteristics of staff and might therefore be expected to be hired as employees.12 We were concerned that the NAO Report highlighted that there was no sense of transparency and clarity about the sorts of contracts the BBC put people on, with different messages being sent out to different people at different times, from various parts of the corporation.13 We were also concerned that the plethora of policy changes has ultimately led to the BBC’s approach to hiring freelancers being chaotic and muddled, which had adversely impacted a wide range of individuals. The BBC told us that it intended to simplify arrangements by replacing on-air talent contracts with standard staff contracts and transitioning all staff to the same contracts.14 The governance of the BBC’s approach to PSCs
8As part of our inquiry into off-payroll arrangements in the public sector in 2012, we...
Concluded (the committee's words)
As part of our inquiry into off-payroll arrangements in the public sector in 2012, we were concerned that the use of PSCs within government was not subject to sufficient levels of challenge. We found that some public sector organisations paid too little attention to the need for public officials to uphold the highest standards in public life, and that 6 Qq 12, 16 and 20; C&AG’s Report, paras 2.3 to 2.6 7 Oral evidence, HMRC: Progress Review, HC 1969, Monday 4 March 2019, Q 4 8 Qq 7–8, 42 and 44; C&AG’s Report, para 2.8; House of Commons Committee of Public Accounts, Off-payroll arrangements in the public sector, Twelfth Report of Session 2012–13, HC 532, 5 October 2012, Conclusion and Recommendation 4, pp. 5–6 9 Qq 32, 43 and 44; C&AG’s Report, para 2.10 10 Qq 8, 11 and 44; C&AG’s Report, para 6; House of Commons Committee of Public Accounts, Off-payroll arrangements in the public sector, Twelfth Report of Session 2012–13, HC 532, 5 October 2012 11 Qq 11, 27 and 32–33; C&AG’s Report, para 2.10 12 Qq 22, 45–51; C&AG’s Report, para 2.6 and 2.9 13 Qq 10, 152 and 153 14 Qq 21, 24, 114, 137–138 10 BBC and personal service companies government departments had failed to adequately challenge or control the use of PSCs for senior appointments.15 We were therefore seriously concerned that the BBC was unable to confirm to us, both in the evidence session and in subsequent follow-up, whether its early PSC policy was discussed at an appropriately senior level. It asserted that it had searched extensively for the relevant records and while it was able to find minutes of executive meetings, it admitted that there was no evidence that policies and issues relating to PSCs were “debated and discussed” at these meetings.16
9The BBC explained that HMRC requires the BBC, like other organisations, to retain personal records...
Concluded (the committee's words)
The BBC explained that HMRC requires the BBC, like other organisations, to retain personal records going back six years but this does not cover board minutes and papers. We were concerned that such a major change was not properly discussed and recorded by senior management. At our request, the BBC had another look through its records, including the records of its advisers and internal audits, but could find no reference to such a policy decision being discussed at Executive Board or Committee level prior to the 2012 Deloitte Review.17 It told us that since the abolition of the BBC Trust in April 2017 the Executive Board and Unitary Board have extensively dealt with PSC policies.18 15 House of Commons Committee of Public Accounts, Off-payroll arrangements in the public sector, Twelfth Report of Session 2012–13, HC 532, 5 October 2012 16 Qq 104–108, 148, 149, 151 and 161 17 Supplementary evidence provided to the Committee by the BBC on 28 February 2019 18 Qq 108, 150, 159–161; C&AG’s Report, para 2.11 BBC and personal service companies 11 2 The BBC’s communication of policy changes and wider developments The BBC’s communication of PSC policy changes
10Between 2004 and 2013, the BBC developed policies for what contracting method could be used...
Concluded (the committee's words)
Between 2004 and 2013, the BBC developed policies for what contracting method could be used when hiring freelancers in on-air roles. These policies required individuals in longer-term or higher paid roles to set up a PSC if they did not already have one. It did this in order to protect the financial position of the BBC by transferring the tax risk, and potential associated costs, from itself to the PSC, as, until April 2017, the PSC was responsible for assessing the tax status of the individual employed through it.19 We were concerned that some individuals who transferred to being hired through a PSC felt they had no choice but to do so. Lord Hall acknowledged that the individuals affected had not been given a choice whether or not to be hired through a PSC if they wanted to continue their careers at the BBC.20 The BBC told us that some individuals were content with its policy to only hire certain roles through PSCs, but admitted that others had subsequently made it clear that they were not.21
11The BBC’s policy only to hire individuals in longer-term, higher paid roles via a PSC...
Concluded (the committee's words)
The BBC’s policy only to hire individuals in longer-term, higher paid roles via a PSC affected a wide range of individuals working on a freelance basis. The BBC told those affected to seek independent financial advice. We asked the BBC how it had ensured that advice was properly shared and communicated to those affected. The BBC admitted that it did not know “what advice people were given or what decisions they took”. It told us that conversations with individuals about its policy changes took place with their local line managers, such as station managers, producers or editors, and with the BBC’s business affairs team. It confirmed that individuals would not have discussed their move to a PSC with the BBC’s tax team, which was responsible for, and understood the subtleties of, assessing an individual’s employment status for tax purposes.22 The BBC admitted that a lack of expertise about business affairs on the ground placed a substantial burden on local managers and that, as a result, in some parts of the BBC, “bad or inappropriate conversations, which were not properly dealt with, could have happened”.23 We were concerned to hear of examples from individuals of different messages being sent to different people at different times.24
12HMRC told us that between 2000 and 2017 there was a very high rate of...
Concluded (the committee's words)
HMRC told us that between 2000 and 2017 there was a very high rate of non- compliance with PSCs not paying the correct amount of tax.25 Therefore, in April 2017, the Government introduced reforms that meant public bodies, such as the BBC, became responsible for determining the employment status for tax purposes of individuals they hired through PSCs.26 The BBC then became responsible for deducting income tax and national insurance from payments it made to those it hired through PSCs if it deemed they were employed for tax purposes.27 The BBC told us that, in 2017, it began to do more 19 Qq 12, 13, 20, 23–24, and 100–101; C&AG’s Report, paras 2.3 to 2.6 20 Qq 13, 64 21 Qq 12–14, 17–20, 23, 30, 44, 70–72, 162 22 Qq 12, 24, 44–47 23 Qq 45, 50, 51, and 152 24 Q 152; C&AG’s Report, paras 2.14–2.15 25 Oral evidence, HMRC: Progress Review, HC 1969, Monday 4 March 2019, Q 12 26 Oral evidence, HMRC: Progress Review, HC 1969, Monday 4 March 2019, Qq 1, 7–10 27 Q 30–34, 39, 83, 91; C&AG’s Report, Figure 13, paras 2.10, 2.11, 3.4 and 3.10 12 BBC and personal service companies to explain the impact of the government’s changes to responsibilities for assessing an individual’s employment status. This included communicating with agents’ groups in January 2017 to warn them that it expected its policy to change, and, running seminars and delivering a series of presentations in May and June 2017.28 Nevertheless, the BBC admitted that some conversations between local line managers and individuals in 2017 were still not good enough. It similarly admitted that its one-on-one communications with people had not been good enough, resulting in a lack of clarity and understanding. The BBC told us that it had communicated with individuals before deducting tax from their payments, but accepted that its communication “had not been personal enough to take into account this complex transition period”.29
13The BBC partly attributed difficulties it had in this transition period to the unexpected numbers...
Concluded (the committee's words)
The BBC partly attributed difficulties it had in this transition period to the unexpected numbers of individuals it had to deal with, particularly in radio. Since April 2017, the BBC has used HMRC’s new Check Employment Status for Tax (CEST) tool to determine the employment status of its freelancers. The BBC told us that results from CEST impacted an unexpected number of people, with 92% of 663 on-air freelancers between August 2017 and June 2018 assessed as ‘employed for tax purposes’. This contrasted with the situation before April 2017 where the BBC had assessed the majority of those on-air freelancers requiring assessment as self-employed.30 The BBC told us that it had worked closely with HMRC to understand the new test and ensure it implemented it as HMRC expected, and that early versions of the test gave very similar results to how the BBC had previously assessed individuals’ tax status. But the BBC criticised HMRC’s CEST for being too general, emphasising that the tool’s multi-sector approach meant that it was not well suited to media and broadcasting roles. The BBC told us that the test was difficult to apply and that it had asked for the test to be delayed for six months while it tried to work through what it considered to be some of the inadequacies of the test.31 The BBC and other public sector bodies had significantly less time than the private sector has since been given to prepare for the changes to responsibilities for assessing an individual’s employment status as the “government listened to representations from the private sector about the complexity of the task facing it”.32 HMRC told us it had to balance public sector bodies’ desire to have a longer timeframe with the loss to the Exchequer of about £700 million a year to non-compliance with IR35. HMRC did, however, emphasise how it had been engaging with public sector bodies for some time about changes in IR35 responsibilities and the introduction of CEST.33 HMRC also told us that “there was extensive engagement between HMRC and the BBC over a number of years to provide guidance, including specific guidance for the media industry”.34 The BBC’s relationship with affected individuals
14The impact of the BBC’s implementation of the government’s changes to responsibilities for determining an...
Concluded (the committee's words)
The impact of the BBC’s implementation of the government’s changes to responsibilities for determining an individuals’ employment status for tax purposes has been that some individuals have been caused significant stress and financial hardship. Between April and September 2017 the BBC paid £8.3 million worth of tax on account 28 Qq 41–42 29 Qq 50, 93 and 123 30 Qq 40, 43, 53, 83; C&AG’s report, paras 3.2 and 3.11 31 Qq 43, 76, 84, 89; C&AG’s Report, para 3.12 32 Oral evidence, HMRC: Progress Review, HC 1969, Monday 4 March 2019, Q 2 33 Oral evidence, HMRC: Progress Review, HC 1969, Monday 4 March 2019, Q 3 34 Oral evidence, HMRC: Progress Review, HC 1969, Monday 4 March 2019, Q 20 BBC and personal service companies 13 to HMRC. These payments were for freelancers operating as either sole traders or PSCs that the BBC had initially assessed as employed for tax purposes or unable to determine. It did this to avoid interest and penalty charges for not paying tax that was potentially due.35 Once the BBC had sufficient confidence in CEST, from August 2017, it began to deduct both on-going income tax and national insurance from payments to those it had assessed as employed for tax purposes, as well as amounts to recoup the tax and national insurance it had previously paid in advance on their behalf for April to July 2017. The BBC admitted that the period from August to October 2017 where it was making these recoupments was “very difficult and very chaotic for some people”. It accepted that some people were put under financial strain by paying double tax and that it had not been quick enough in dealing with this. The NAO reported that the BBC paused the recoupments after complaints from the individuals affected. The BBC told us that it has now “spent much more time talking to people and working out what to do” and it would deal with the remaining balance in due course.36
15The BBC accepted that some individuals are concerned that they are being investigated by HMRC37...
Concluded (the committee's words)
The BBC accepted that some individuals are concerned that they are being investigated by HMRC37 because the BBC has started to treat them as employed for tax purposes from April 2017, when they were previously treated as self-employed. The BBC estimated in May 2018 that there were around 800 people previously considered as ‘self-employed’ but whose employment status had shifted to ‘employed for tax purposes’ when it applied the CEST and were therefore at risk of being challenged by HMRC. Of these 800 people, around 300 individuals were hired through PSCs.38 The BBC told us that it had provided some low level financial assistance to some individuals. In June 2018, the BBC announced a payment of up to £500 to people earning less than £45,000 a year, to contribute to any additional book-keeping costs individuals have incurred following the April 2017 changes. By August 2018, it had paid out almost £12,000 on 33 claims. It told us that it had also agreed a process to deal with expense claims during 2017–18, when some individuals were potentially paying tax but were not able to claim expenses from the BBC.39
16The BBC has set-up a mediation process to handle individual cases.
Concluded (the committee's words)
The BBC has set-up a mediation process to handle individual cases. However, it has paused this process as it is seeking to agree, by the end of March 2019, a settlement with HMRC for outstanding tax claims. It told us that the settlement was very difficult and complicated and agreeing it was taking much longer than it anticipated. It recognised that it was not fair that two individuals who relied on the same rules found themselves in very different positions in terms of their tax liabilities and that this was very time consuming, stressful and difficult for all involved. It told us it was trying to achieve a settlement that provided certainty for individuals that HMRC will not retrospectively investigate those individual’s tax affairs, including national insurance payments.40 HMRC told us that it is “open to reaching a settlement” and that it would be more convenient in administrative terms, but that it was essential that any settlement complies with its policy that requires the correct amount of tax to be paid in that settlement. Due to reasons of confidentiality, HMRC was unable to provide us with any details of the progress of its settlement discussion with the BBC.41 35 Qq 1, 122, 127; C&AG’s Report, para 4.6 36 Qq 93 and 122; C&AG’s Report, para 4.7 37 Qq 25 38 Qq 25–27; C&AG’s Report, paras 3.11, 4.11 39 Qq 125–126; C&AG’s Report, para 4.8 40 Qq 27, 119–121, 143–145; C&AG’s Report paras 4.10–4.12 41 Oral evidence, HMRC: Progress Review, HC 1969, Monday 4 March 2019, Qq 17–19 14 BBC and personal service companies
17We were concerned that even if the BBC were to agree this settlement, there are...
Concluded (the committee's words)
We were concerned that even if the BBC were to agree this settlement, there are continuing issues that remain unresolved and may have financial implications for the BBC. The BBC admitted that it would have to deal on an individual basis with any tax issues which subsequently arose which were not covered by the settlement. We asked the BBC how it intended to address the issue of the potential loss of employment benefits, such as pension payments or sick pay, in cases where people on staff contracts were forced to become freelancers and set up a PSC. The BBC cautioned that calculating the potential loss would not be straightforward and that some of these cases, if they occurred, would have been the result of the individuals concerned choosing to move across into a presenting role, a role which traditionally had been filled by freelancers, but accepted that each case would have to be “looked at role by role, individual by individual”. The BBC also emphasised that it would be challenging to identify the potential financial impact of loss of employment benefits in these individual cases as “you would normally expect freelance rates to be higher than staff rates, because people are responsible for their own benefits”.42 42 Qq 14, 29–31, 137, 140–142 and 146–147 BBC and personal service companies 15
Evidence
Oral evidence sessions 1
- 30 Jan 2019No witnesses recordedparliament.uk ↗