Working “Off-Payroll” In Public Broadcasting
You should be aware of the revised tax rules relating to individuals supplying their services to the public sector. The revision to what is commonly known as “IR35” will affect anyone providing services to the BBC or Channel 4 through limited companies.
Put simply, the new rules state that if the individual would have been an employee of the broadcaster but for the existence of their limited company, the broadcaster will be required to operate PAYE on all payments made to the limited company – and it is now the responsibility of the broadcaster to decide whether or not that should be the case.
Once that decision has been made, any individuals caught within the scope of IR35 will be open to scrutiny from HMRC for their past arrangements. So, given the potential consequences, it is vital that the broadcaster comes to the correct decision when reviewing these arrangements – especially as the individual has no right of appeal in the case of any disagreement. Already, in the short time the new rules have been in operation we have already encountered issues including:
- Unfamiliarity of public authorities with the new rules and the decision-making process;
- The unreliability of the HMRC online tool used as part of the decision-making process; and
- The marketing of a number of dubious “avoidance schemes” promising an individual retention of 90% or more of fees paid by public authorities.
All of these areas can have a severe impact on the amounts received by individuals and, in the case where avoidance schemes are involved, could leave them open to severe HMRC penalties.
Our team has a wealth of experience with IR35 issues going back many years and can assist with:
- The review of contracts and arrangements with broadcasters to ensure the correct treatment of payments within the new rules;
- Advising on the options available going forward without getting involved in schemes that will leave tax, interest and penalty liabilities; and
- Assist in dealing with any HMRC review relating to prior years resulting from the introduction of the new rules.
For further information please contact David Coppard