BBC faces struggle to axe presenters' tax-saving freelance contracts
24th January 2014 | News
The BBC’s highest-paid television presenters have been informed they will stop being paid through ‘personal service companies’ after the corporation promised the Government to stop paying staff through freelance contracts at a lower rate of tax.
The revelation has not gone down well with the corporation’s best-known presenters, who are reported to be asking the BBC to reconsider their actions.
Presenters such as Jeremy Paxman, Fiona Bruce and Emily Maitlis are said to be paid in this manner. Those whose freelance contracts are close to expiry have been asked to end their off-payroll arrangements to avoid any suspicion of tax avoidance.
As a trade-off, the BBC is asking its presenters to sign on as a permanent staff member, qualifying for a BBC pension and additional benefits, but they would have to accept pay cuts of up to 25 per cent.
More than 6,000 BBC freelancers are currently paid through personal service companies, allowing them to be taxed as companies as opposed to individuals.
The personal service company arrangements have been branded “staggeringly inappropriate” by the Commons public accounts committee, which suggested the BBC could be complicit in tax avoidance. The rate of corporation tax – which companies pay on profits – is as much as 20 per cent lower than the income tax which high-earning individuals face.
Sue Ayton, a talent agent with BBC clients on her portfolio, said: “In my opinion the BBC – with its huge internal resources – has got into a real mess on this one and after spending a great deal of time and money trying to resolve it has only created more confusion and frustration.”
Meanwhile a BBC spokesman said: "From November last year the BBC has been applying a new employment test to all on-air television presenters. If the result of that test shows employment, talent have been offered on-air talent employment contracts.
"There is no truth in claims that television presenters are refusing to move to staff roles."