MPs have been told by HMRC at a Public Accounts Committee (PAC) hearing that the BBC is responsible for tax issues that have left freelance presenters facing retrospective tax bills.
HMRC’s IR35 lead Jim Harra said inconsistencies between status outcomes returned by HMRC’s Check Employment Status for Tax (CEST) tool and assessments conducted prior to CEST’s release were due to the corporation's previous employment status practices as being "quite a bit adrift".
In November 2018, a National Audit Office (NAO) report revealed that CEST’s evaluation of 663 BBC freelancers found as many as 92% to be "employed for tax purposes". This represented a sharp rise when compared with the outcomes reached using the broadcaster’s previous practices.
During the hearing Harra said: “There has been extensive engagement between HMRC and the BBC over a number of years. We have worked with the BBC to provide guidance that’s relevant to the media.”
Harra added: “The answer that CEST gives is only as good as the quality of the input." He also stressed that simply using CEST won’t necessarily mean HMRC won’t investigate if it suspects there is tax to be claimed.
When asked exactly what hiring organisations need to do to ensure that their interpretation of CEST’s questions are correct according to HMRC, Harra said: “They need to have systems and processes in place that will withstand our scrutiny. What we will look at is the process that businesses follow internally to make sure that they are entering the true facts into the tool.”
