Contractors can at last see the test devised by the BBC and HMRC to decide whether the Corporation’s on-air talent in news and television should be engaged as freelancers; contractors running their own limited companies; or employees.
“The BBC test is far from impartial and simply isn’t up to standard,” notes ContractorCalculator CEO Dave Chaplin. He says the reality of the test has confirmed his worst fears: “Finally seeing the BBC “employment test” in all its glory just confirms our early conviction, 20 months ago, that there is nothing positive in its introduction.
“As we feared, the test seems to be nothing more than a sop to headline-hungry politicians who were involved in an aggressive anti-public sector contractor witch-hunt back in early 2012. What the test certainly doesn’t do is add any clarity – either in the BBC or the wider public sector.”
Personal service company contractors moving to PAYE
But are the tests working? The BBC says that it is applying them as contracts fall due for renewal. Without being specific, it explains: “Those news and television presenters who are deemed employees have transferred to employment status with PAYE deducted at source, with more expected to follow in 2014.”
Chaplin questions how the tests were applied, and speculates that on-air presenters and contributors who have moved to PAYE are more likely to have done so under internal and political pressure than because the test results were conclusive.
For him, the pointless nature of the BBC test is perhaps why the Corporation has been so keen to keep it a secret. The fact that it is finally public is testament to ContractorCalculator’s lengthy Freedom of Information battle, which ended successfully when the BBC was forced to publish the test on 21 July 2014, as part of its 2013/14 annual report.
Five vague questions that can lead to being told you need to do another test
The BBC’s own description hints at the fact that there is no need for this additional layer of bureaucracy: “Broadly, the test follows a similar format of the current HMRC Employment Status Indicator,” says the Corporation.
And Chaplin explains why, with even just a cursory examination, the BBC test is irreparably flawed: “It isn’t based on case law and bears little resemblance to the whole picture required in a proper evaluation of whether or not someone is an employee.
The BBC test is irreparably flawed. Asking five questions to evaluate employment status is a nonsense.
Dave Chaplin
“To ask five questions as a way to evaluate employment status is nonsense, particularly when by answering ‘no’ to the five questions you are then told you need to do a further evaluation! ContractorCalculator’s gold standard online IR35 employment test has 52 questions and, importantly, is based on case law.
A test that’s out of ‘control’?
The BBC’s approach to testing whether or not a worker is controlled by the Corporation also concerns Chaplin. “The whole control test – a key part of many decisions on employment status – is left wide open to interpretation.”
The first question asks whether there is ‘significant’ editorial control by the BBC. “The control test is well established in case law,” says Chaplin, “and so needs to be judged by a professional lawyer with extensive experience in employment status.”
He also points out that, if the test does not show significant control of the worker, then they are allowed to continue working through their own personal service company.
New tests neither replace or augment what came before
Chaplin is damning: “The BBC has effectively paid lip service to the 2012 witch-hunt and put in a fairly redundant paper exercise to appease HMRC, HM Treasury and politicians. Suffice to say, it’s business as usual, except for the added overhead – to be paid by licence payers – of a bit of box ticking.”
He is sympathetic to the pressure the BBC was under from government in 2012 to tackle the perceived tax avoidance of a small number of BBC contractors. “After weeks of screaming headlines, the BBC was forced to say it would ‘move away’ from engaging on-air talent on long-term contracts as personal service companies’.”
What it promised instead was to ‘introduce a more objective and specific employment test for any new engagement’. Chaplin says: “Alarm bells began ringing immediately, because it is simply not possible to build an objective test for employment status.
“Not only that, but it was never made clear whether the introduction of the BBC test was to replace or augment HRMC’s own muddled guidance. Sadly, it seems, the answer was ‘neither’; the tests were introduced to get the Corporation out of a hole that had been dug by the government.”