BBC’s ‘self-employed’ stars in tax crackdown
...but bosses will let them pay back bill over months
BBC stars have been warned by bosses they could be hit in the pocket by a major tax crackdown.
Presenters and other staff have been able to avoid high personal rates of tax by being self-employed.
This allowed them to be paid through personal service companies – which attract only the 20 per cent rate of corporation tax. But the Government has now acted to close down this loophole.
A letter seen by the Daily Mail was sent by the BBC to staff to explain that HMRC had changed the way employment status was assessed. It warned that some would now be taxed at the full 45 per cent rate.
In July, the corporation confirmed that some stars were being paid through personal firms. The Mail discovered that Chris Evans, Jeremy Vine and Claudia Winkleman have personal companies.
Also among top BBC earners who had private firms were Alan Shearer, Alex Jones, Huw Edwards, Steve Wright, Simon Mayo, Nicky Campbell, Nick Grimshaw and Vanessa Feltz.
But while these stars own personal companies, there is no way of knowing whether they are paid by the BBC through them because neither they nor the corporation responded to questions from the Mail.
Last night a source revealed that some freelance staff would now become employed by the corporation and taxed at source. The source said the BBC would backdate the tax payments from April and deduct them from September’s pay packet.
The insider said: ‘There’s literally mutiny as most presenters, especially in local radio, can’t afford to pay back the money owed.’ Some staff were said to be in tears and others furious or devastated.
It is understood that staff who are unable to pay the tax they owe in a single payment in September can ask to repay it over a series of months. The BBC will not be lending staff money but instead could cover the cost on their behalf and wait to be repaid via salary deductions.
This may spark concern among licence-fee payers that their money is not being handled correctly.
Last night it was unclear whether the BBC would wait until it had recouped all of the backdated tax from workers before paying HMRC or pay it in the coming weeks and wait to be repaid by staff. reportA publicin 2012 outcry that greetedfound the a corporation was paying more than 124 stars via personal service companies, which allowed them to be taxed as a company rather than as an individual.
But a change to HMRC’s IR35 legislationthe responsibilityto determinemeans of thatthe the correctis corporationnow employment status of staff for tax purposes.
In March, HMRC introduced a new test that freelancers could use to assess whether they were employed or self-employed. The test was originally issued to help support public sector bodies to assess the employment status of those working within their organisations, but it can be used by anyone. A spokesman for the BBC said: ‘The Government’s new rules apply to all public bodies including the BBC and Channel 4. ‘We are making sure we comply with the law and licence fee payers don’t pick up the liability for the wrong tax or NI contributions being paid.’ The spokesman added: ‘We will allow some individuals to repay back tax through deductions in salary over a number of months to avoid hardship.’
‘In tears, furious and devastated’