100 BBC stars could face huge tax bills after regional news presenter is told to pay £420k
A FORMER BBC regional news presenter has been ordered to pay almost £420,000 in tax in a ruling that could land other TV stars with massive bills.
Christa Ackroyd was the anchor of BBC Look North in Yorkshire for 12 years until inquiries into her tax affairs led to her being taken off air.
She exploited a widely- used practice to lower her tax bill by working for the BBC as selfemployed rather than staff.
But an HMRC tribunal has ruled she was under a contract of employment rather than freelance and, as such, subject to different tax arrangements. Rulings on as many as 100 other cases involving people working for the BBC are expected in the coming months.
Miss Ackroyd, 60, joined the Corporation in 2001 from ITV and was employed under two fixedterm contracts. While earning around £200,000 a year from the BBC, she was paid dividends through a personal service company, Christa Ackroyd Media Ltd (CAM), to lower the amount she would otherwise have had to pay in income tax and national insurance.
It was said to have been stand- ard industry practice at the time, but the BBC began a review of the contracts following widespread criticism in 2012 that it was allowing stars to avoid paying their full income tax.
Miss Ackroyd, who runs a luxury B&B in West Yorkshire with her husband, says she was taken off air without warning in 2013 when the taxman began investigating her affairs and the BBC refused to meet her or her advisers.
The tax panel’s judgment stated: ‘As a result of the review the BBC changed the way it viewed personal service companies. It no longer intended to engage on-air talent with longterm contracts through personal service companies. The BBC anticipated that a number of such individuals would be offered employment contracts when their current contracts expired. No employment contract was ever offered to Miss Ackroyd.’
HMRC had ordered her to pay £419,151 covering a seven-year period to 2013 and the presenter ‘Not a tax cheat’: Former BBC Look North presenter Christa Ackroyd has been hit with a massive bill has now lost an appeal to a tax tribunal. Miss Ackroyd had argued that she had a level of independence from the BBC but the tribunal panel ruled this was not control over content of the programme, rather control over the way she worked.
Its judgment said her seven-year contract was a ‘highly stable, regular and continuous arrangement’ and added that Miss Ackroyd was subject to the same editorial controls as other employees.
It meant she was effectively doing a ‘full-time job’ for the BBC and amounted to an employee.
While ruling in favour of HMRC, the tribunal said it did not criticise the presenter for the way her affairs had been handled, adding: ‘She took professional advice in relation to the contractual arrangements with the BBC and she was encouraged by the BBC to contract through a personal service company.’
The judgment stated that she had a genuine belief that by the end of the contract she was being ‘victimised’ and made a ‘ scapegoat’ following an internal inquiry into the BBC’s use of freelancers.
Miss Ackroyd said last night: ‘The contract issued by the BBC has now been deemed a contract of employment rather than freelance and is as such subject to different tax rules.
‘As you can imagine I have suffered five horrendous years of innuendo and gossip suggesting I am a tax cheat. This judgment proves once and for all I am not.’
A BBC spokesman said: ‘ Until last year it was for individuals with service companies rather than those engaging them to determine their status for tax purposes.
‘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.’
‘Five horrendous years of innuendo’