Television presenter Christa Ackroyd has lost an appeal at the Upper Tribunal over her tax status at the BBC.
The dispute arose following unpaid taxes, with HM Revenue & Customs determining that Ackroyd owed £419,151 in tax and national insurance contributions (NICs) for the tax years from 2006/7 to 2012/13.
Ackroyd argued that she was a freelance contractor, rather than a BBC employee, having presented on BBC’s Look North news programme. She provided services through her personal service company (PSC), Christa Ackroyd Media Ltd, and worked until two successive fixed-term contracts between her PSC and the BBC.
The Upper Tribunal ruled that the First Tier Tribunal decision was correct, where it asserted an ultimate right of control over the presenter, defining her role as an employee rather than a contractor.
A spokesperson for HMRC said: “HMRC welcomes the judgment that the presenter is within the intermediary rules. HMRC has won the majority of tribunal decisions involving television presenters.
“It is right that an individual who works through a company, but would have been an employee if they were taken on directly, pays broadly the same amount of tax and National Insurance contributions as employees.”
HMRC published draft legislation that will take effect in April 2020, which places the responsibility on the private sector to check if contractors must pay tax and national insurance contributions. This means that the onus will be on the employer using the services of the contractor, rather than the contractor themselves.
It is important therefore that businesses caught by the forthcoming rule changes seek legal advice as to the employment status of their staff for tax purposes before they take effect.
The rules came into effect for public sector organisations contracting workers through their own PSCs in 2017.