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BBC defends forcing some freelancers to be paid through their own companies BBC defends forcing some freelancers to be paid through their own companies
(40 minutes later)
The BBC has defended forcing some freelancers to be paid through their own companies, arguing that it is an industry-wide practice endorsed by the government.The BBC has defended forcing some freelancers to be paid through their own companies, arguing that it is an industry-wide practice endorsed by the government.
Tory MP Daniel Kawczynski accused the BBC of ordering freelance staff who earn more than £10,000 a year to invoice through a third-party company, meaning the corporation does not have to pay millions of pounds in income tax and national insurance contributions.Tory MP Daniel Kawczynski accused the BBC of ordering freelance staff who earn more than £10,000 a year to invoice through a third-party company, meaning the corporation does not have to pay millions of pounds in income tax and national insurance contributions.
Kawczynski, speaking at a debate on the future of the BBC at Westminster Hall, accused the corporation of forcing out those who do not adhere to what he said was a new policy. He labelled the practice "staggering and highly deplorable".Kawczynski, speaking at a debate on the future of the BBC at Westminster Hall, accused the corporation of forcing out those who do not adhere to what he said was a new policy. He labelled the practice "staggering and highly deplorable".
A spokesman for the BBC did not deny that the practice was commonplace, instead seeking to clarify finer points of the accusations made by Kawczynski.A spokesman for the BBC did not deny that the practice was commonplace, instead seeking to clarify finer points of the accusations made by Kawczynski.
The spokesman focused on pointing out that it is no change in policy – details of the well-established practice were uncovered by MediaGuardian.co.uk in March – and that it is not a corporation-wide edict.The spokesman focused on pointing out that it is no change in policy – details of the well-established practice were uncovered by MediaGuardian.co.uk in March – and that it is not a corporation-wide edict.
"The BBC's requirement for some freelancers to be paid via a service company is not a change in policy nor does it apply to BBC staff as has been suggested," he said."The BBC's requirement for some freelancers to be paid via a service company is not a change in policy nor does it apply to BBC staff as has been suggested," he said.
In March a freedom of information request revealed that the BBC employs almost 12,000 freelancers, and of that about 3,000 channel their income through personal service companies. The BBC does not pay income tax and national insurance contributions. A BBC spokesman said presenters and talent were forced to move from being directly paid freelancers to payment by a third-party company at a trigger point relating to the amount of work they do for the corporation, adding that this is commonplace.
At least 41 BBC freelancers paid £100,000 or more in 2011 did not pay tax at source, with five of these earning more than £150,000 per year. In addition, 318 people earning more than £50,000 were also shown as having not paid tax at source in that year, the BBC admitted. The argument goes that when the workload reaches a tipping point – say a freelance presenter moves from fronting one or two programmes a year to getting a weekly slot – then the financial obligation for tax and insurance needs to move to the individual.
The BBC points out that the contributions are still paid, but they are handled by the individual not the corporation.
In March a freedom of information request revealed that the BBC employs almost 12,000 freelancers as "behind the scenes" staff, such as directors and camera operators and technical and support staff, and of these about 3,000 channel their income through personal service companies. The BBC does not pay income tax and national insurance contributions for those with personal service companies.
At least 41 BBC freelancers paid £100,000 or more in 2011 did not pay tax at source, with five of these earning more than £150,000 a year. In addition, 318 people earning more than £50,000 were also shown as having not paid tax at source in that year, the BBC admitted.
A BBC spokesman argued that the practice is in no way illegal and that the government is well aware of the practice across the broadcasting industry.A BBC spokesman argued that the practice is in no way illegal and that the government is well aware of the practice across the broadcasting industry.
"In agreement with HMRC the whole of the broadcast industry makes use of them because they allow flexibility for both the broadcaster and the individual whilst also ensuring the appropriate level of tax and national insurance is paid," he said."In agreement with HMRC the whole of the broadcast industry makes use of them because they allow flexibility for both the broadcaster and the individual whilst also ensuring the appropriate level of tax and national insurance is paid," he said.
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