Limited company media and entertainment contractors working on-air for the BBC are facing an ‘employment test’ that the broadcaster has admitted is intended to “significantly reduce the number of personal service companies” on its books.
In a response to a Freedom of Information Act (FOI) request submitted by ContractorCalculator, the BBC has confirmed that it is currently working with Deloitte to develop “a new set of criteria as to when on-air talent should be engaged as freelancers or employed as staff”.
“Once this test is finalised and agreed with HMRC, this framework will be rolled out for all on-air engagements,” Rachel Currie of BBC People told ContractorCalculator. She also confirmed the broadcaster’s commitment to cut contractor numbers by replacing them with employees.
Despite the furore last July when Conservative MP Daniel Kawczynski accused the BBC of “ordering freelancers to set up their own companies” and subsequent criticism by parliament’s Public Accounts Committee, Currie confirms that only “three people have requested to be moved onto employment contracts”, suggesting that so far the entire exercise has been a waste of BBC licence payer’s money.
To put this into perspective, a review of the use of limited company contractors in on-air roles conducted by Deloitte during 2012 revealed that “there were 3,272 personal service companies contracted by the BBC during the financial year 2011/2012”.
The number of limited company contractors “represents a small proportion of the on-air talent workforce that year of just over 53,000 individuals” which engaged in over “200,000 transactions” with the BBC during the same period.
In response to ContractorCalculator’s request for details of the amount of additional tax raised by the exercise, Currie admitted that it was not possible to provide the information. “Until the framework has been agreed with HMRC, and the review of all service companies is complete, we cannot provide you with the information you request since we do not hold it,” she says.
The BBC was originally planning to introduce its new employment test by April 2013, which has clearly yet to happen, and the response to ContractorCalculator’s FOI request provides no further information about when media and entertainment contractors can expect the test to appear.