Liz Kershaw, the Reverend Richard Coles and other leading broadcast presenters have come out warning that after them, HMRC will be squeezing the rest of the self-employed for tax.
The BBC has recently been embroiled in a tax row with numerous high-profile presenters including Front Row presenter Kirsty Lang, DJ Liz Kershaw and former BBC Look North presenter Christa Ackroyd.
The issue? The public broadcaster had been paying them as contractors, through personal services companies, rather than as employees. HMRC claims this is “disguised employment” which results in it getting less tax. But many presenters claim that the BBC had told them to set up personal service companies for their fees.
HMRC, however, still called for hundreds of thousands of pounds in back-dated tax from them, the bulk of which is tax the BBC avoided paying by engaging the presenters as freelancers. Christa Ackroyd, for example, lost her appeal against a backdated income tax and national insurance charge of £419,000.
The presenters were at pains to stress, however, that it is not just presenters HMRC is coming after. Designers, producers and many other hard-working behind-the-scenes contractors are also targets.
As the Reverend Richard Coles told Modern Work: “I think if people knew that the great majority of BBC people affected by IR35 are not ‘stars’ but hard-working people serving their local communities, often behind the scenes, they would better understand why there is so much anger at the hardship and distress it is causing.”
He said: “No one I have spoken to objects to paying tax, but it must be fair, and these changes threaten to ruin honest individuals who find themselves on the wrong side of a poorly thought through and clumsily executed government tax policy.”
Nor is it just the BBC. In October, it was revealed that HMRC was also targeting Eamonn Holmes for tax in what he described as a “test case” for other ITV presenters and contractors working through limited companies.
He said: “I am the test case. If they win against me, they will go after everyone else, everyone. Ant and Dec will be next.”
The presenters warn, however, that the squeeze will not just be limited to the media. In an article in the Daily Express recently, Liz Kershaw warned the rest of the self-employed: “Next time you open a brown envelope on your front door, ‘it could be you’.”
She said: “In his recent Budget the chancellor triumphantly announced to the ‘ordinary hard-working families’ of Britain - who have had a bellyful of belt-tightening, stagnant wages and falling living standards – that austerity is ending.
“But how has he managed it? THE DETAIL is buried in the Budget’s small print. The Treasury, with HMRC as its henchmen, is aiming to rake in £3.1billion from the UK’s sole traders. The self-employed.
“The entrepreneurs. The risk-takers. The small businesses. Or, as HMRC now calls them, the disguised employee.
“The chaos at the BBC is a taste of what’s to come for private businesses. It is the start of a slippery slope towards disaster.”