www.broadcastnow.co.uk
8 November 2013
STEVEN D WRIGHT
MTV EMA
BEHIND THE SCENES
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We are artists by any other name
Creating the greatest show on earth
How to build a fantasy world from scratch
BBC puts talent to test over tax Top stars to lose benefits of using personal service companies following employment review BY JAKE KANTER
The BBC appears to be cracking down on avoidance where none exists Darren Fell, Freelance Advisor
Great Britain’s Great War: new rules mean Paxman could join BBC payroll
When a star’s contract is up for renewal, the BBC will assess how much editorial control it has over their activities. If the answer is a “significant” amount, then it is likely that the individual will be asked to join the corporation’s wage bill. But if the individual creates and delivers programmes, or has a more casual relationship with the BBC based on short-term appearances, then it is more likely they will be classified as self-employed. The BBC estimates that around 40 news presenters could be classified as employed under the new rules, which means names including Jeremy Paxman and Fiona Bruce may have to stop doing business with the corporation through their PSC and join the payroll. There is some concern that this will result in a pay cut for those
PSC S THE BACKGROUND The BBC launched a review of its contracts with freelancers and talent last year amid fears it was aiding tax avoidance schemes. It found: ■ 3,272 on-air freelancers were paid through PSCs ■ 124 stars, earning £150,000 or more, use PSCs ■ 5,319 off-air contractors engaged through PSCs individuals, but BBC commercial director Bal Samra insisted that any reduction in salary would mainly be because income tax and national insurance will be deducted by the BBC. “This is not an active strategy to get talent pay down,” Samra said,
adding that there will be no “special cases”. If it is determined talent should be employed then they must join the payroll or leave. Stars will not be offered “full fat” employment contracts, Samra explained, meaning they will be given the flexibility to work for other broadcasters if they wish. “I sincerely hope we won’t lose any talent and they appreciate the clarity we’re bringing,” he added. Freelance Advisor founder and freelance advocate Darren Fell said: “The BBC appears to be arbitrarily cracking down on perceived avoidance where none exists. They themselves admit there is nothing wrong with the employment arrangements of these freelancers, but overzealous politicians appear to have backed them into a corner.” The introduction of the employment test follows a BBC-commissioned Deloitte review last year, which found “weaknesses” in the corporation’s policies for engaging freelancers and “growing public concern” over PSCs. The BBC’s test could be used as the basis for HMRC’s new TV employment test, which could be introduced in summer next year. £4.99
The BBC is prepared to lose some of its key talent as it begins putting them through employment tests as part of a campaign to tighten up its tax arrangements. The corporation is attempting to clamp down on the use of personal service companies (PSCs) and is seeking to introduce more consistency to its contracting arrangements in a move that could force some its highest-profile stars to join the payroll, or leave the BBC. The employment test will be applied by the BBC to talent contracts that are up for renewal from next week (with the exception of non-news radio, where HM Revenue & Customs guidelines already exist), but the broadcaster has started briefing agents about potential changes to their clients’ deals. The BBC has already begun testing off-air talent, where it is thought that 20% – or around 3,000 – of more than 16,000 production freelancers and other contractors may be asked to become BBC employees. The corporation anticipates that around 80% will continue to be booked via PSCs. But it is on-air talent where the BBC faces its stickiest issues, with recent reports claiming that stars are in “revolt” over the changes. Many use PSCs as a legitimate means of securing work from the BBC, but Public Accounts Committee chair Margaret Hodge criticised them for raising “suspicions of complicity in tax avoidance” because income tax and national insurance contributions are not deducted at source.