BBC talks IR35 guidance with HMRC
New IR35 guidance for BBC presenters with Personal Service Companies is to be drawn up by HMRC, FreelanceUK has learnt.
By the end of last week, the corporation was quietly told to submit proposals for HMRC’s consideration, as were other broadcasters keen to provide PSCs (also known as freelance or limited companies) with guidance on the rule.
Talks on the matter between HMRC and the BBC are at the highest level, with the director-general of each organisation directly liaising with the other, a person close to the talks added.
The resulting broadcaster-only IR35 guidance will raise the prospect that other sectors of workers, freelancers in the creative industries for example, will also get their own tailored guidance on IR35.
But a status advisory yesterday said there were “anomalies” in the broadcasting sector which made it a special case, deserving of HMRC exceptions or caveats to the rule .
“The entertainment industry is very unique when it comes to status and there are already some guidelines in place that do not apply elsewhere,” said Qdos Contractor.
Another IR35 consultancy Bauer & Cottrell agreed, saying the idea of industry-specific guidance “is not new,” as ES Manual 4100 already lists ‘self-employed’ entertainment roles.
And it is this ‘safe harbouring’ of certain roles that the HMRC-BBC talks are heading towards. An update or bolt-on to CEST, just for the BBC, has been ruled out at this stage.
“The ‘grading’ list, as HMRC calls it, applies to particular entertainment industry occupations at the moment,” says Qdos Contractor CEO Seb Maley.
“However, it's entirely plausible that HMRC could look to extend this to many more film and camera roles given the furore over the BBC presenters.”
An employment status lawyer, who declined to be named, suggested that if HMRC did give ‘safe harbour’ to certain roles in an industry, other industries would appeal for the same.
'Rod for HMRC's own back'
So HMRC may create ‘a rod for its own back’ if it grants IR35 exemption to roles in just one sector but, he added, any wider exemptions could help the ‘NHS and others in a pickle.’
Advisers who have used this ‘safe harbour’ system sound as if they would prefer its expansion into the private sector, over a straight extension of the public sector IR35 reforms.
“There was previously an ‘agreed’ set of guidelines as to who was in a self-employed ‘grade,’ says Bauer & Cottrell’s co-founder Kate Cottrell.
“HMRC has always had special units for this industry…[and for these entertainment PSCs], you used to be able to call the unit who were very knowledgeable on all the contracts.”
Qdos is supportive too, although not unreservedly.
“While the certainty this would bring would perhaps be positive in some respects, it's always dangerous to apply one rule to all workers in a particular role.
“There can be endless variances in the way someone works or runs their own business,” it said. “To ignore all of these, could prove to be detrimental and unfair.”
However, HMRC has the time to get it right.
'Nothing as soon as this year'
“This has been going on [behind the scenes at the BBC and HMRC] since last October,” said the person familiar with the talks.
“So I cannot see any formal guidance [as a result] coming out this year.”
Yesterday, HMRC did not deny the existence of the BBC-HMRC talks. But a Revenue spokesman declined to be drawn, other than to reiterate its support for its currently recommended way to test for IR35 in the public sector -- CEST.
“CEST has been used over 750,000 times since it was introduced in March 2017,” the spokesman said.
“The CEST service gives an answer in 85% of cases, and where it does not generate an answer, customers are then able to call a dedicated helpline staffed by specialists who can give them further advice.”