A number of BBC presenters could be facing bills for thousands of pounds in backdated tax after HM Revenue & Customs (HMRC) won a key Tribunal ruling against a Ms Christa Ackroyd.
The former Look North presenter previously worked at the BBC using a personal service company (PSC), which meant that she was self-employed and using a limited company instead of being directly employed by the broadcaster. Using such a vehicle meant that much lower tax payments needed to be paid.
However, after an investigation by HMRC, Miss Ackroyd was fired by the BBC in 2013 because HMRC claimed that she was, in reality, a BBC ‘employee’ and therefore not entitled to the tax breaks she had been benefiting from.
After a five-year legal battle, the First-Tier Tax Tribunal (FTT) has ruled against Miss Ackroyd, meaning that she must pay HMRC £419,151 in income tax and National Insurance Contributions (NICs).
Despite this, the Court documents show that it was the BBC who suggested that she work using a PSC in the first place. Due to this, television presenters in similar positions have banded together to demand that the BBC pays, at minimum, the NIC elements of any bills they might face.
While the Tribunal ruling does not set a case law precedent, it marks the first time in seven years that HMRC has won a case relating to IR35 rules – which govern the tax paid by those who work for clients via an intermediary.
A spokesman for the BBC said that the use of PSCs is entirely legitimate and common practice across the industry, as it provides flexibility for both individuals and organisations.
They added that an independent review conducted in 2012 found that there was no evidence that the BBC had attempted to avoid income tax or NICs by contracting in this way.