BBC to Add Highly Paid On-Air Talent to Staff Amid Change to Freelancer Policy
The U.K. public broadcaster is changing its freelance policies after criticism that it has helped people avoid taxes.
LONDON - The BBC said Wednesday that it will move at least some of its on-air talent from freelance to lower-paid staff posts.
The news comes after recent criticism that the U.K. public broadcaster has helped freelancers get paid as if they were companies rather than individuals, which allows them to avoid taxes.
A recent U.K. parliament report confirmed that the BBC pay scheme helps on-air stars avoid taxes. The BBC previously also admitted paying about 1,500 freelancers as so-called “personal service companies." It signaled that it could place 130 of its highest-earning freelancers on staff.
BBC freelance stars affected include newsreader and TV presenter Fiona Bruce and Newsnight presenter Jeremy Paxman, as well as radio and TV presenter Chris Moyles and Top Gear presenter Richard Hammond.
Paxman claimed earlier this year that he had been told by the BBC that he had to set up a company to receive his earnings from the corporation.
A BBC review looked at a sample of contracts and files and included an assessment of 469 existing on-air talent service companies and 335 self-employed freelancers.
"The BBC has a high standard of tax compliance and there is no evidence that the BBC uses personal service companies to aid income tax or National Insurance Contributions avoidance," the broadcaster summarized the findings of its review on Wednesday. "Retaining a freelance model is critical for the success of the BBC to enable creative renewal for our audiences and deliver value for money."
But it added that the BBC's "current policy for contracting is inconsistent - with on-air talent engaged as staff, self-employed or via a personal service company, often doing very similar work."
The broadcaster said it targets to introduce the changes in time for the new fiscal year that starts in April. It didn't specify which hosts could be affected by the changes.
The BBCsummarized its changes to its freelance contracting arrangements this way:
"The BBC will move away from its previous position of engaging on-air talent on long-term contracts as personal service companies. Instead it will:
1. Introduce a more objective and specific employment test for any new engagement, and individuals will be offered a staff contract when appropriate
2. Work with [tax authorities] to develop new objective criteria for the tax treatment of on-air TV and radio presenters where none currently exists. This will enable the BBC to engage individuals who meet the criteria as self-employed without the risk of misclassification and help to further reduce the number of personal service companies."
Said BBC CFO Zarin Patel: “Our review shows the BBC is not using personal service companies to avoid tax or help others avoid tax. Nevertheless, it shows inconsistencies in the way our policy has been applied. We are addressing this with a more objective employment test for all new contracts and by developing a new framework...for self-employed on-air presenters.”