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Some BBC staff may have been forced into the use of Personal Service Companies, often with detrimental effects, according to written evidence published by the Digital, Culture, Media and Sports Committee.
The Committee says it has evidence that journalists may have been forced to set up PSCs which mean they have lost out on employment rights and have faced liability for large tax bills.
Chair of the Committee Damian Collins MP, said: “It is highly disturbing to hear stories of talented broadcasters and journalists allegedly being forced on to contractual arrangements that have had serious and damaging consequences for them – not only on their financial circumstances but, in some cases, their mental health.”
The report comes after a BBC journalist was ordered to pay a tax bill of just under £420,000 when HMRC won a case against her for avoiding tax through disguised employment. She had used a personal services company to work on a freelance basis.
One female presenter who gave evidence to the Committee said she was forced to set up a PSC after going on maternity leave. She was then investigated by HMRC and ordered to pay tens of thousands of pounds of National Insurance Contributions which she says the BBC would have paid if she had been staff. She states: “During 18 years of continuous presenting I have had no staff benefits, no holiday pay, no sick pay, no maternity pay, and no BBC pension contributions. In 2015 the BBC said instead of paying me through a PSC, I had to have an OAT (On Air Talent) contract. I was told I had to accept a 12% cut for statutory benefits or 25% for BBC benefits. It was deal or not deal. I was threatened with losing my job and therefore my livelihood if I did not sign. During the same period, I asked for equal pay terms and conditions as male BBC co-presenters, who were staff, and doing the same job as me. I was not given them, and have not been to date.”
Another wrote of being forced to set up a PSC then made to go on short-term contracts when the IR35 issues sprang up. She was then told to go on PAYE, but with no employment rights and paid four thousands pounds less than another male colleague doing the same job. She reports that her mental health has suffered badly as a result. She writes: “I have always loved working for the BBC, but the way they have behaved has reduced me to more than tears.” She added that the stress was one factor which had recently led to her attempting suicide.
Collins said: “This evidence indicates that the BBC is falling well below the standards we would expect in terms of how it treats its staff. It is disappointing that BBC management are not coming in person to answers questions on their handling of these contracts. Following the evidence hearing on Tuesday, I will be writing to the Director General, Lord Hall, seeking answers to a series of written questions related to our strong concerns about the use of PSCs.”
Andrew Chamberlain, Deputy Director of Policy and Public Affairs at freelance organisation IPSE, said: We’ve been trying to cram modern working practices into a rapidly aging tax system, and the cracks are starting to show.
“The UK tax system is no longer fit for purpose, it’s based on an outdated principle that all income tax payers are employers or employees, which they are not.
“There are now 4.8 million self-employed people in the UK, representing 14% of the workforce. This is not a peripheral group, this is a significant pillar of our economy.
“IPSE has been calling strongly for a comprehensive review for some time now. The review should be chaired by an independent expert, and should make recommendations aimed at making simplifications for taxpayers.”