BBC Under Investigation

Famous broadcasting network, BBC, recently got introduced to the necessity of investigation insurance, having recently been put under investigation by the UK’s National Audit Office, following concerns raised by both the Parliament and the network’s employees. The investigation looks at the people hired by the BBC on a freelance basis, with a particular focus on individuals hired via PSCs, or Personal Service Companies.

Through their investigation, the NAO discovered that the BBC has already make steps in order to help the individuals affected by the matter, but they state that there are issues that remain, which will lead to effects that’ll linger and may lead to financial implications for the network later down the road.

BBC hires thousands of freelancers annually, which cover a variety of roles, both on and off the air, ranging from actors, entertainers, and off-air workers like camera operators, among others. Between 2004 to 2013, the network set policies for what contracting methods should be used when hiring freelance workers for their on-air vacancies.

These policies were based on whether the roles were employed or self-employed, with regards to taxation, and on the BBC’s understanding of HM Revenue & Customs’ (HMRC) guidance, for on-air presenters, for the industry’s practices.

The UK government introduced the Finance Act 2000, more commonly known by ‘IR35’, as a way to address concerns that companies were using PSCs in order to avoid paying the proper amount of taxes. The bill is aimed at ensuring that people who work directly and through a PSC pay the comparable income tax and national insurance.

Central to the IR35 is the assessment of a person’s employment status, with regards to taxation. However, there is no precise statutory tests, which makes assessing employment status complicated, and necessitating both investigation insurance and a case-by-case approach on such matters.

The Committee of Public Accounts addressed BBC’s use of 2012 back in 2012 as part of investigations into off-payroll employment across the UK’s public sector.

Five years later, on April 2017, UK government transferred the responsibility of determining employment status for taxation for PSC-employed individuals to the public bodies that hire them. Prior to that, PSCs handled such a task themselves, and, as such, carried the risk of erroneously assessing employment status and ending up paying the wrong amount of taxes.