BBC in a 'mess' over presenters' tax affairs, say MPs

The BBC has failed to untangle the “mess” it has made of presenters’ tax affairs, MPs said yesterday as the National Audit Office found that 800 presenters could yet face crippling tax demands.

Over the past seven years, the BBC has paid around £700m via personal service companies for presenters and backroom staff, according to an NAO report.

The broadcaster has been embroiled in controversy since it emerged that it had pressured presenters into setting up the companies, depriving them of employment rights such as holiday and sick pay while allowing the BBC to avoid paying millions in National Insurance contributions.

Many presenters then found themselves pursued by HMRC. Last year, HMRC transferred responsibility for ensuring the correct tax was paid from the personal service company to the BBC, leaving freelance staff facing further demands.

The NAO report says 800 presenters could potentially be asked to pay back tax, with HMRC currently investigating 100.

Meg Hillier MP, chairman of the Public Accounts Committee, said: “[We] raised concerns about the BBC’s use of personal service companies six years ago.

“It is worrying that, six years on, the mess of clarifying the employment status for tax purposes of people the BBC hires through PSCs has not been fully entangled.

“With around 100 investigations into PSCs still outstanding, the BBC and HMRC must work together to ensure certainty for freelancers working for the BBC, particularly for those freelancers who have been left in desperate circumstances.”

The BBC told the NAO that it has paid bridging loans to three people, totalling £2,550, “to enable them to overcome short-term cash flow problems”, and has contributed £12,000 in bookkeeping fees to 33 people with personal service companies.

It currently employs 2,590 television and radio presenters and 2,555 off-air staff via personal service companies.

An HMRC spokesman said: "Presenters are now increasingly paying the right tax and most do.

"Where presenters have not paid the right amount of tax it is right that we enforce the law so people are treated equally and fairly."

A BBC spokesman said: "We recognise there are still issues to address and remain committed to resolving them. We are currently in discussions with our presenters and are actively engaged with HMRC to explore the options for resolution."

Elsewhere yesterday, Lord Hall of Birkenhead, the BBC director-general, gave a speech calling on media organisations to “work together to defend journalism”.

He asserted that the BBC’s “core value is impartiality” and that “in an ear of dispute it is one of our most precious assets”.