Laura Perrins recently reported on the humanitarian disaster unfolding in London W1A: an avalanche of brown envelopes marked HMRC has begun potentially to devastate the finances of many BBC presenters, to the extent that it can only be a matter of time before David Miliband and his International Rescue Committee arrive to help the casualties ‘survive, recover and gain control of their future’.
In expectation of there soon being an emergency fund to prevent any of these much-loved media personalities becoming destitute, I stand ready to divert my own charitable contributions – when a BBC broadcaster is at risk, the blind and their guide dogs can go hang. In the meantime, to prevent hardship at the BBC we appeal urgently to TCW readers to donate designer clothing and non-perishable foodstuffs – the victims have requested Fortnum & Mason hampers.
My leaden satire refers, of course, to the Times report on June 15 that many of the BBC’s highest earners are now being clobbered for backdated tax on earnings previously paid through personal service companies rather than the BBC payroll: at the time, the Corporation avoided employer’s national insurance and the individuals benefited by the rate of tax on their BBC earnings being that due on a company profit rather than on an employee’s pay.
In April, TCW referred to an example of this practice in an item titled ‘Poor Sarah: our hearts bleed for you and your £133,000’, the Sarah in question being Radio 4’s Ms Montague – aka, because of her marriage to a hereditary baronet, Lady Brooke. During the interregnum between her leaving Today and taking over The World at One, Montague had given to The Sunday Times a remarkably haughty interview, in which the broadcasting aristocrat was quoted as being ‘incandescent with rage’ that her remuneration for co-presenting Today was just £133,000, a figure she described as ‘professionally damaging’. Mercifully, concerned readers were relieved to learn that by job-swapping with Martha Kearney, Sarah has now secured ‘a deal for the future . . . using the pay of previous presenters as a guide’, predecessor Kearney having been in the pay bracket £200-250,000.
All of which led her to the self-aggrandising conclusion that for far too long she had been ‘subsidising other people’s lifestyles’, and that she ‘felt a sap’ when she realised.
TCW remains sure that Sarah Montague Limited has always operated with probity. Nevertheless, evidently it has been but one of many personal companies servicing the BBC – an organisation which, as Laura Perrins rightly noted, is never an advocate for lowering taxes or restraining public spending. When HMRC is pursuing both the Corporation and its high earners, it requires a heart of stone not to laugh.
But perhaps we should curb the hilarity, because the Times’s headline actually says ‘BBC apologises to stars for “upset” over tax bills’. Ominously, it goes on to report: ‘Anne Bulford, the BBC’s deputy director-general, wrote to presenters to reassure them that the broadcaster was working with the taxman to resolve issues over their bills “as speedily and comprehensively as we can”.’ At which point, an alarm bell rings and the laughing stops.
In March 2018, some BBC presenters gave evidence on the matter of personal service companies to the select committee of the Department for Digital, Culture, Media & Sport (DCMS). ‘This is the story of the BBC forcing hundreds of presenters to form companies and treat them as freelancers,’ said Money Box host Paul Lewis in his evidence to the MPs, while Front Row’s Kirsty Lang plaintively appealed: ‘Where is [the BBC’s] duty of care?’ Rather than accept personal responsibility, it seems that BBC presenters are unanimously pleading ‘coercion’; furthermore, the Corporation is sufficiently apologetic to have already announced a process under which it will consider contributing – using public money, of course – to the backdated employers’ national insurance (though not to any other taxes) now being levied on the personal service companies.
But even if, as is now apparent, many staff felt the Beeb had given them no choice but to operate as a company, it was incumbent upon those broadcasters to do so only with expert advice, especially being high earners with potentially large tax liabilities. However, it now is clear that many failed to obtain adequate guidance: for example, had an individual simply been classed as an employee of their private service company, and their entire BBC earnings gone through its payroll, all income tax and national insurance due on BBC earnings would already have been accounted for and paid to the Treasury. Such an arrangement would not have resulted in, as an example, the plight of former Look North presenter Christa Ackroyd who, though found to have acted in good faith, was nevertheless hit with a bill for £419,151.
As the Times’s report judiciously emphasises: ‘There is no suggestion that any BBC presenters have used personal companies to avoid due tax. The BBC said the use of such companies is legal and it has never used them to avoid tax or national insurance.’ Nevertheless, many of our BBC favourites are now learning to their cost that, as with most things in life, if the amount of tax being paid on high earnings seems too good to be true, then it probably is.