BBC in IR35 Trouble

BBC IR35

Released yesterday (15th November), a report from the National Audit Office has stated that the BBC required some freelancers to operate through personal service companies (PSCs.)

Investigation into the BBC’s engagement with personal service companies reveals that the BBC has paid nearly £700 million into personal service companies set up by its presenters and other workers over the past few years.

The findings further emphasise the shambolic nature of the off-payroll IR35 rules as they currently stand. The legislation, in its current format, lets down contractors and freelancers as well as the public sector bodies which seek to engage their skills.

With the private sector rollout currently scheduled for April 2020, it would be sensible for the government to iron out the cumbersome barriers to correct IR35 implementation as soon as possible. If this doesn’t happen, the transition is likely to be mired in difficulty.

The report noted that more than 6,700 freelancers were paid through PSCs at the peak of the scheme. Hiring workers through these PSCs meant that the BBC did not have to pay employers’ national insurance. The arrangement also offered the individuals involved potential tax advantages.

Today a large number of presenters and workers face large claims from HMRC, who state that they avoided tax by being paid as contractors rather than employees. So, what is the sticking point, apart from the obviously disastrous financial implications for the individuals involved? To put it simply, many of those hired under the agreement have accused the corporation of giving them no choice.

The numbers involved are significant. The report reveals that there are over 100 open investigations into BBC-related PSCs. Between 2011 and 2018 the BBC paid over £668 million to freelancers.

In their defence, the BBC insists that almost all of the people under investigation were legitimately classed as freelance workers. A large proportion of those freelancers only undertook occasional work for the company – camera crew, actors, and entertainers to name a few. Around 60,000 freelancers a year are hired by the BBC.

In a damning indictment, the NAO report found that a startling 92% of on-air freelancers who recently had their status reviewed by the BBC were “employed for tax purposes determination”, meaning that they should never have been contracted through PSCs.

The company estimates that around 800 of its presenters will face a challenge from HMRC, and has been trying to financially assist those who are struggling to meet tax liabilities they had, until relatively recently, been unaware of.

Press speculation has suggested that the BBC is attempting to broker a deal with the taxman that would allow them to pay a lump sum in return for dropping all actions against its presenters for back tax.

Where the case goes from here is currently unclear. For their part, the BBC have stated that “we recognise there are still issues to address and remain committed to resolving them. We are in discussions with our presenters and are actively engaged with HMRC to explore the options for resolution.”

If previous cases are anything to go by, it will not be an easy task to satisfy HMRC. Whatever happens from here, the potential problems caused by IR35 regulations and the general lack of clarity and understanding around them are clear for all to see.

Budget 2018: Kingsbridge Reaction

Budget 2018

Another year, another Budget. In recent times, contractors and the self-employed have become used to watching the Chancellor’s pronouncements from behind the sofa. It would be an understatement to say that the last few announcements weren’t particularly kind to the contracting community, so it was understandable if many approached this October’s Budget with trepidation.

Amid much rumour and speculation, there was uncertainty as to how the self-employed would fare this time around. Although many in the community were hoping that proposed private sector IR35 reform would be abandoned, in truth it was never likely to be an option.

Despite a plethora of evidence to the contrary, in recent months the government has gone to some lengths to praise the success of IR35 reform in the public sector. The real question was a simpler one: would similar reforms apply to the private sector from April 2019 or April 2020?

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Happy Halloween – What really scares contractors and freelancers?

Halloween

It’s the spookiest time of the year: ghosts and ghouls around every corner; jack o’ lanterns glowing; annoying children ringing the doorbell every 10 minutes asking for sweets. But it’s not zombies and witches that we’re afraid of. Here are the top 5 things that give contractors nightmares this Halloween…

1.    Non-paying clients

You sent the invoice straightaway. You clearly outlined your payment period. You sent a polite chaser email. And yet, somehow, still, no money has appeared in your account. The dwindling balance sends a shiver down your spine! Yes, the non-paying client is the most terrifying spectre a contractor can encounter. They look just like normal clients…until the full moon comes out and the balance is due, then they show their true colours.

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Budget 2018: Contractor Preview

Budget 2018

Fright Night for Contractors and Freelancers?

It’s that time of the year again. No, not Halloween. The Budget. But that’s not to say that there won’t be a few scares in the Chancellor’s big red box come 29th October. So what might leave contractors and freelancers waking up in a cold sweat in the middle of the night this time around?

Firstly, the fact this year’s Budget is a little earlier than normal (it normally takes place in mid-to-late November) has set a few alarms bells ringing.

It could be nothing, and it may well be an attempt to get ‘distractions’ out of the way before pressing on with the real business of Brexit, but there is speculation that an early Budget date has been put in place in order to give the government time to perfect the launch of the heavily rumoured private sector IR35 reforms.

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The future of self-employment

Future of Self-Employment

At Kingsbridge, we work predominantly with contractors and freelancers, who still make up a large number of self-employed people in the UK. However, we’re also aware that the face of self-employment is ever-changing, particularly in recent years, and we’re seeing different roles emerging all the time.

So, what could the future of self-employment look like?

Contractors and freelancers

Going forward, contractors and freelancers will still be a huge part of the self-employed workplace, especially as employers begin to embrace more flexible working environments. Hiring contractors and freelancers on a project-by-project basis may well be more appealing to some employers, rather than having a full-time permanent employee-base who don’t necessarily have a lot to do between projects. Freelance workers can also be used to fill in gaps in a workforce with a high proportion of part-time workers.

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Don’t let your contractor CV become clichéd

CV Mistakes

Your CV (or, indeed, LinkedIn profile) is the first thing prospective clients will see when you apply to work with them and, of course, you want to set yourself apart from the other contractors in your field.

Let us tell you now, the way to do this is not by filling your CV with meaningless, clichéd buzzwords that are more likely to send prospective clients looking in the opposite direction. The Plain English Campaign largely deals with getting jargon out of public comms, but that ethos can be applied to your CV too. So, instead of rubbish, fill your CV with simple facts that tell clients all they need to know about you.

What are the words and phrases to avoid?

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No Brexit Deal? No Problem (For the UK Energy Sector at Least)

Brexit

Brexit. A contentious issue if ever there was one. It’s something that everyone has an opinion about – you’d be hard pressed to find anyone sitting on the fence when it comes to our relationship with the EU.

We’ve written on these pages before about the possible ramifications that Brexit could have on the contracting community, and it hasn’t been altogether positive. It’s important to note, however, that no one truly knows what the future holds. It’s very much a leap into the unknown – we can predict and prevaricate all we like, but the situation will only become clearer once we take that final step.

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Contracting mistakes: Why it pays to have the right cover in place

Contractor Mistakes

We’ve written many times on these pages in the past about the importance of having insurance in place. Whether you’re a contractor, a recruiter placing a contractor in a role, or the end client, it’s important that you do everything you can to minimise risk.

99% of the time everything goes smoothly. Deadlines are met, measurements are accurate, and projects are completed. But there are times when things don’t go quite as planned. The financial and reputational costs that come with a claim are likely to be large, and having the right cover in place will help you to offset any costs you will incur.

So why are we bringing up this particular topic again? Two stories in the news recently got us thinking.

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How not to email

How Not To Email

Email has become one of the most common methods of communication in the modern workplace. It’s easy, quick and enables conversations between colleagues without the need to be in the same physical space, as well as allowing for the sharing of documents and images.  As contractors and freelancers are more likely to work remotely than other workers, they rely on email even more than most.

Perhaps, then, contractors and freelancers are strong candidates to be the most annoyed by the nine most irritating work email phrases as uncovered by Adobe last month. Of course, they may be more likely to commit these offences too.

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