BBC forces stars to give up freelance deals due to tax-dodge perception

Corporation to register 131 on-air presenters as staff in change to pay policy after review

Jeremy Paxman and Fiona Bruce are among star BBC presenters likely to be compelled to change their freelance tax arrangements and become registered as staff employees at the Corporation.

The BBC revealed that it pays 178 freelancers more than £150,000-a-year each, as it yesterday took steps to change the employment status of some of its presenters.

It accepted that the practice adopted by many familiar Corporation figures of operating as personal service companies (PSCs) – rather than working as an employee and paying PAYE – was regarded with suspicion by the public.

Parliament’s Public Accounts Committee has also raised concerns, leading the BBC to compel 131 on-air presenters to register as staff.

A spokesman said: “The BBC wishes to address the public perception that off-payroll contracts and in particular personal service companies are used to avoid tax.”

A review by the accountants Deloitte shows that the BBC pays an army of 64,447 freelancers in total.

“As a priority”, the organisation will be subjecting 804 “on-air” freelancers to new employment tests. It said: “This could result in an estimated 131 individuals being offered staff employment when their current contract expires.”

The test will later be extended to all 6,123 individuals being paid by the BBC through PSCs, though many of these are receiving only small amounts.

The Deloitte review found the BBC pays £150,000 or more a year to 124 stars using PSCs, with 102 more receiving upwards of £100,000 and 243 being paid over £50,000 annually. An additional 54 “self-employed” freelancers are paid more than £150,000 a year.

Zarin Patel, the BBC’s chief financial officer, said yesterday that a number of these individuals, especially those who depended on the BBC for more than 80 per cent of their earnings, should be reclassified as employees. “They have the characteristics of an employee and therefore should be employed.”

Deloitte found no evidence that the BBC uses PSCs to aid income tax or National Insurance contributions avoidance.

Despite this, the stars who are transferred to staff status may be unhappy to lose the 5 per cent tax deductions that they are entitled to claim for legitimate “management expenses” when operating as personal service companies.

The subject has been a sensitive one for decades. In 1993, the Independent on Sunday exposed how the then BBC Director General John Birt was employed as a freelancer and used his status to offset the cost of his Armani suits against tax. The paper claimed that the arrangements saved Birt £30,000 a year.

Today Ms Patel stressed that no member of the current BBC executive was using a PSC. Earlier this year she was subjected to a grilling by the Public Accounts Committee when she denied that the BBC was involved in a conspiracy to cheat the Exchequer. “I emphasise that none of this is designed to avoid tax. That is not why we use an extensive number of freelance contracts at the BBC,” she told MPs.

But the chairman of the committee, Margaret Hodge MP, said: “A lot of people on these contracts are the face of the BBC and therefore to pretend that they are anything other than pretty permanent features on our television screens and on the radio is pretty naïve.”

Having called in Deloitte to carry out a review, the BBC acknowledged that its system was “inconsistent”. It admitted that “on-air talent engaged as staff, self-employed or via a personal service company” were “often doing very similar work”.

The BBC has long faced criticism over the money paid to on-screen talent at a time when its budgets and services are being cut.

It said it had previously encouraged on-air talent to use PSCs to protect the BBC from being held liable by Her Majesty’s Revenue and Customs for shortfalls in tax resulting from individuals making errors in their tax returns.

News
people
Sport
FootballGerman sparks three goals in four minutes at favourite No 10 role
News
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
Sport
A long jumper competes in the 80-to-84-year-old age division at the 2007 World Masters Championships
athletics
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
Radamel Falcao was forced to withdraw from the World Cup after undergoing surgery
premier leagueExclusive: Reds have agreement with Monaco
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Life and Style
Walking tall: unlike some, Donatella Versace showed a strong and vibrant collection
fashionAlexander Fury on the staid Italian clothing industry
Arts and Entertainment
Gregory Porter learnt about his father’s voice at his funeral
music
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Life and Style
Children at the Leytonstone branch of the Homeless Children's Aid and Adoption Society tuck into their harvest festival gifts, in October 1936
food + drinkThe harvest festival is back, but forget cans of tuna and packets of instant mash
Sport
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
New Articles
i100
Life and Style
Couples have been having sex less in 2014, according to a new survey
life
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Media

Head of Marketing - London

£60000 - £85000 per annum: Ashdown Group: Interim Head of Marketing / Marketin...

IT Application Support Engineer - Immediate Start

£28000 per annum: Ashdown Group: IT Software Application Support Analyst - Imm...

Digital Project Manager

£25 - 30k: Guru Careers: A Digital Project Manager is needed to join an exciti...

Paid Search Analyst / PPC Analyst

£24 - 28k + Benefits: Guru Careers: We are seeking a Paid Search Analyst / PPC...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam