BBC’s new employment status test could backfire, warns contractor community
9 November 2012
The BBC’s decision to review the pay arrangements of 804 of its freelancers who are currently paid through their own personal service companies (PSC) by applying a new employment test, is a one-off. It is also unlikely to lead to a flood of other organisations following suit, according to those working in the UK contractors and freelance community.
Fri, 9 Nov 2012
The BBC’s decision to review the pay arrangements of 804 of its freelancers who are currently paid through their own personal service companies (PSC) by applying a new employment test, is a one-off. It is also unlikely to lead to a flood of other organisations following suit, according to those working in the UK contractors and freelance community.
In a statement, Zarin Patel, chief financial officer at the BBC, says: “Although Deloitte agreed that engaging freelancers through PSCs was legal and appropriate…In some cases, some of the on-air talent appear to have the characteristics of 'staff' and might be expected to be engaged as employees.”The BBC says it will apply the new test to those staff earning over £50,000 a year who are paid through a PSC or as self-employed contractors once they come to the end of their current contracts.
It says the test “could result in an estimated 131 individuals” being offered staff employment contracts when their current contract expires.
The BBC’s announcement comes after it commissioned a report by Deloitte and its own internal auditors following the corporation’s appearance before the Public Accounts Committee in July 2012 when its arrangements for paying highly paid staff through their own PSC rather that through the BBC payroll was criticised.
Dave Chaplin, founder and chief executive of ContractorCalculator, told Recruiter that the situation at the BBC is a one-off, and he doesn’t see other organisations, in either the public or private sector, following its example. Indeed, he says it could backfire on the BBC. “Just because the BBC decides to put someone on their payroll doesn’t mean they have to accept it. “They might say I am a freelance. I will go and work for someone else, he says.
And he suggests that HMRC might now look into the tax arrangements of the 131 concerned. “If not why not?” he says.
Stuart Davis, the chair of the Freelancer & Contractor Services Association (FCSA), defended the right of employers to use freelancers, if they so choose.
“There is nothing wrong or inappropriate for any employer, including the BBC to employ freelancers, if done properly, for the right reasons and where those concerned pay appropriate taxes,” says Davis.
Martin Hesketh, managing director of Brookson, added: “For the broader freelancing and contractor community, there is little direct impact unless you are providing services to the BBC.
“What this does do is reinforce the importance of employment status and being able to genuinely demonstrate that services are being provided as an independent, self-employed worker and not as a disguised employee.”
Philip Venn, managing director of Boox, says::
“Often the freelancer is the last person to be considered within business when they contribute an estimated £202bn to the UK economy, greater than the financial services industry and greater than manufacturing and construction combined.”
The BBC’s decision to review the pay arrangements of 804 of its freelancers who are currently paid through their own personal service companies (PSC) by applying a new employment test, is a one-off. It is also unlikely to lead to a flood of other organisations following suit, according to those working in the UK contractors and freelance community.
In a statement, Zarin Patel, chief financial officer at the BBC, says: “Although Deloitte agreed that engaging freelancers through PSCs was legal and appropriate…In some cases, some of the on-air talent appear to have the characteristics of 'staff' and might be expected to be engaged as employees.”The BBC says it will apply the new test to those staff earning over £50,000 a year who are paid through a PSC or as self-employed contractors once they come to the end of their current contracts.
It says the test “could result in an estimated 131 individuals” being offered staff employment contracts when their current contract expires.
The BBC’s announcement comes after it commissioned a report by Deloitte and its own internal auditors following the corporation’s appearance before the Public Accounts Committee in July 2012 when its arrangements for paying highly paid staff through their own PSC rather that through the BBC payroll was criticised.
Dave Chaplin, founder and chief executive of ContractorCalculator, told Recruiter that the situation at the BBC is a one-off, and he doesn’t see other organisations, in either the public or private sector, following its example. Indeed, he says it could backfire on the BBC. “Just because the BBC decides to put someone on their payroll doesn’t mean they have to accept it. “They might say I am a freelance. I will go and work for someone else, he says.
And he suggests that HMRC might now look into the tax arrangements of the 131 concerned. “If not why not?” he says.
Stuart Davis, the chair of the Freelancer & Contractor Services Association (FCSA), defended the right of employers to use freelancers, if they so choose.
“There is nothing wrong or inappropriate for any employer, including the BBC to employ freelancers, if done properly, for the right reasons and where those concerned pay appropriate taxes,” says Davis.
Martin Hesketh, managing director of Brookson, added: “For the broader freelancing and contractor community, there is little direct impact unless you are providing services to the BBC.
“What this does do is reinforce the importance of employment status and being able to genuinely demonstrate that services are being provided as an independent, self-employed worker and not as a disguised employee.”
Philip Venn, managing director of Boox, says::
“Often the freelancer is the last person to be considered within business when they contribute an estimated £202bn to the UK economy, greater than the financial services industry and greater than manufacturing and construction combined.”
