Wealth Manager - the site for professional investment managers

Register free for our breaking news email alerts with analysis and cutting edge commentary from our award winning team. Registration only takes a minute.

Over 100 BBC stars face hefty tax bills after HMRC wins landmark battle

2 Comments
Over 100 BBC stars face hefty tax bills after HMRC wins landmark battle

Former BBC presenter Christa Ackroyd is facing a tax bill of almost £420,000 after Her Majesty's Revenue and Customs (HMRC) won a landmark battle, which could have wider implications for freelancers.

Ackroyd was one of a number of people employed by the BBC through personal service companies.

In his Budget last October, chancellor Philip Hammond indicated he was targeting ‘disguised employment’ within the private sector, which could net the government around £1 billion in unpaid taxes. 

The potential loophole was initially identified by previous chancellor George Osborne in his 2016 Budget. 

HMRC has become increasingly concerned that personal services companies, used by the likes of IT contractors, consultants and journalists, have become vehicles to avoid paying personal tax and national insurance. 

It is believed that at least 100 past and current BBC presenters are being investigated for alleged tax avoidance through personal service companies. Fiona Bruce and Jeremy Paxman are among the BBC stars who have used these companies to cover their payments. 

In its Ackroyd ruling, the tax tribunal in Leeds said that while this was not a test case, ‘we understand that the present appeal is one of a number of other appeals involving television presenters and personal service companies.’

The tribunal stressed that HMRC had ‘never suggested’ Ackroyd was a tax cheat or had acted dishonestly.

The BBC said the use of personal service companies was 'entirely legitimate and common practice' across the industry.

'The BBC was not party to this case, and as was standard industry practice at the time the individual was engaged as a freelancer in 2001 and paid via their existing company,' a BBC spokesperson said. 

'Until last year it was for individuals with service companies rather than those engaging them to determine their status for tax purposes. The use of personal service companies is entirely legitimate and common practice across the industry as it provides flexibility for both individuals and organisations.

'An independent review conducted in 2012 found that there was no evidence that the BBC had attempted to avoid income tax or NIC by contracting in this way.'

Ackroyd presented Look North in Yorkshire from 2001 to 2013 and was paid through her personal service company Christa Ackroyd Media Ltd (CAM).

HMRC claimed that as an employee of CAM, the company was liable for income tax and national insurance payments. Ackroyd disputed this, arguing she was a self-employed contractor and therefore CAM had no further liability.

Ackroyd said the ruling had brought an end to ‘five horrendous years of innuendo and gossip’ around her financial affairs.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
1 Comment Play Citywire Scotland: how wealth managers use new tech

Citywire Scotland: how wealth managers use new tech

We caught up with a few wealth managers at our annual event in Gleneagles to find out what technological innovations they are employing across their businesses.

1 Comment Play CEO Tapes: Buxton to Gilbert - ‘my Glencore quandary’

CEO Tapes: Buxton to Gilbert - ‘my Glencore quandary’

Do not miss the first two minutes of this film as Richard Buxton shares how he has been challenged by a client for owning shares in a certain company.

Play CEO Tapes: the huge opportunities for asset managers

CEO Tapes: the huge opportunities for asset managers

From tech disruption, retirement and poaching, the CEO discuss the opportunities for their businesses in this episode.

Read More
Wealth Manager on Twitter