TaxCorporate TaxDeloitte: BBC ‘inconsistent’ in contracting

Deloitte: BBC 'inconsistent' in contracting

Deloitte's review finds no evidence of wilful tax avoidance in hiring freelancers, but the BBC is to revamp its hiring strategy

Deloitte: BBC ‘inconsistent’ in contracting

THE BBC is “inconsistent” in its policy for contracting , a review by Deloitte and its internal auditors have found.

The review looked at the structures used by individuals hired by the BBC, and its approach to differentiating between those that are freelance and those employed by the broadcaster. The use of contractors within the BBC has proved controversial, with some saying that they are in fact disguised employees and the structures they work within help avoid employment taxes.

It found that there were often occasions where on-air talent engaged as staff, through personal service companies or freelance, were often doing very similar work.

A new test will be launched to gauge whether those hired should in fact be employed, and the BBC will work with the taxman to develop tax treatment for on-air and radio presenters where none currently exists.

The new test, which will be operated by Deloitte, will apply to 804 on-air freelancers.

“This could result in an estimated 131 individuals being offered staff employment when their current contract expires,” the BBC said in a statement.

The changes are intended to come into effect from the April 2013 financial year.

The review found that 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.

It is “critical” for the BBC to retain a freelance model, the review found, to “enable creative renewal” and deliver value for money, the review added.

Zarin Patel (pictured), CFO of BBC, said: “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 with HMRC for self-employed on-air presenters.”

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