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Comment on BBC Contractors By Jeanette Barrowcliffe, finance director of Meridian Business Support

Comment on BBC Contractors  By Jeanette Barrowcliffe, finance director of Meridian Business Support

The news that the BBC is using schemes to minimise its tax bills for thousands of staff, including well-known presenters and celebrities, just serves to highlight how the government still does not understand the need to keep up with the UK’s dynamic labour landscape and how emotive this subject is.

This is illustrated by the warning issued by a cross-party parliamentary committee that the use of off-payroll arrangements by the BBC gives rise to "suspicions of complicity in tax avoidance". The committee is making a common assumption that is borne by a lack of real understanding of the situation. Despite the claims by HMRC that there are millions outstanding in owed taxes from non-compliers throughout the country, the fact is that the vast majority of contractors legitimately record their earnings. The broadcasting corporation has stated that many of its contractors were on deals that “can often share the characteristics of typical PAYE contracts”, so they appear not to have engaged in anything akin to outright avoidance. Indeed, the only amount not being paid in this scenario is employer’s national insurance, so one could argue that the BBC is doing the general public a favour by making this & lsquo;saving’ to the public funds.

The taxation of contracted workers has come under scrutiny even before this incident, with HMRC seemingly lacking the resources to effectively identify and police the minority found to be using & lsquo;disguised employment’, which IR35 was designed to stop. With the shift towards a more flexible temporary workforce so integral to the economic recovery of the UK, there is a clear need for HMRC to engage in some progressive thinking around the policing of the taxation of contracted workers. The government also needs to realise that hauling public sector organisations like the BBC over the coals is not constructive. Rather, it fuels the emotive and misguided perception that individuals paid in ways other than PAYE are not paying their fair share.

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