BBC row overlooks role of most freelancers

The row over high profile freelancers and the BBC has continued to rumble on with allegations that the corporation has 'forced' employees into limited company status while others choose to take the personal service company route solely as a means of avoiding tax and national insurance.

Meanwhile, politicians choose to classify tax payments as 'morally right', 'morally wrong' and even 'morally repugnant', rather than the straightforward legal or illegal. Whether MPs as a group have any justification in taking such moral high ground to make these judgements is a matter for a different debate!

Nevertheless, since the head of the Student Loans Company, Ed Lester, and other senior public service workers were exposed by the media for operating through a 'sham' freelancer status rather than 'on-the-payroll', the term freelancing has become more and more associated with tax dodging as opposed to a flexible workforce.

The Government responded with plans to put any person who has a controlling position within an organisation on the payroll so that tax and NICs would be deducted at source. Some thought this a knee-jerk reaction to a problem which already had a solution - enforce IR35 rather than introduce more wide-reaching laws which inevitably would catch more people than it intended.

Martin Hesketh, managing director of specialist accountants Brookson, joins the debate to argue that the recent furore around how freelancers are paid by the BBC is a misrepresentation of the sector by the Government and HMRC.

Martin writes:

Martin Hesketh

"There are more than 1.6 million freelancers working in the UK and doing so legitimately. Of those, 25,000 work on a contractual basis for the BBC.

"Unfortunately what we're seeing here is a shift in focus from what is a compliant way of working for the majority of freelancers, to the scrutiny of 148 high profile individuals.

"The attention given to this select group overlooks the average freelancer who has chosen this way of working and who does so in line with current tax legislation. Freelancing is a popular way of working for many professionals in the creative sector and is reflected in the high numbers of people choosing to be paid through a public limited company.

"Individuals choosing to be self-employed are in a very different position of security to someone who is a full time employee – they run the risk of customers not paying bills, no sick, holiday or maternity pay and contracts being ended at very short notice.

"In exchange for the risks and for the contribution they make to the UK's economy, genuine freelancers should be afforded with flexible and variable work and the rewards associated with the risk they are undertaking and deserve to be supported by an effective tax system.

"The Government and HMRC are using high profile examples to hide the real problem around tax avoidance in the UK and would do better to focus on policing the existing rules and regulations that are already in place to address the issue.

"Freelancers are critical to the recovery of the UK's economy but both the Government and HMRC continue to overlook this section of the flexible workforce. Instead self-employed professionals are once again made to feel their way of working is under fire and this could be detrimental to the workforce as more individuals opt out of choosing this route or take their skills elsewhere."