Since 2018, the BBC has been involved in a protracted and bitter argument with some of its best-known presenters, including Lineker, over their employment status.
Specifically, how they paid their tax.
It stems, it is argued, from the broadcaster’s insistence that they become self-employed. Some presenters, including the former 6 Music presenter
Liz Kershaw, say they were forced by the Beeb to become self-employed and to pay their tax through limited companies. She told i the broadcaster did this so it could more easily fire its self-employed presenters.
While the arrangement benefited the BBC and to a degree its top-earning stars, the taxman was not impressed, and BBC stars including Lineker have spent years tied up in legal cases after being pursued with claims by HMRC for tax they say he owes.
Presenters who set up limited companies paid corporation tax, and a dividend tax on their profits, rather than income tax. This saw them pay up to half the amount of tax they would had they been employed directly by the broadcaster.
Lineker’s case will have been going on for years and his fees for employing expensive tax lawyers who charge hundreds of pounds an hour will cost hundreds of thousands of pounds, according to tax experts. HMRC is demanding the presenter pay just under £5m. It is pursuing him under “off-payroll working” rules known as IR35.
Lineker has appealed, and in a hearing last month his lawyer effectively argued that the taxman should not be pursuing Lineker but the BBC.
Many within the tax industry have sympathy with Lineker’s legal argument.
“I don’t think there is any question that HMRC should be going after the BBC rather than Gary Lineker, particularly for one of the years that they are looking at,” said Robert Salter, an employment and payroll tax expert at Blick Rothenberg, the accountancy firm. From 2017, he says, the law was clear that the tax status of employees was the responsibility of the company and not the individual.
Liz Kershaw has told
i that while presenters have been left to deal with the tax repercussions of their employment status, “it was the BBC that created the situation”.
She added that while Lineker is very highly paid, other less well remunerated presenters and BBC staff have experienced none of the upsides of being self-employed but also some very distressing downsides. They lost access to benefits, such as sick pay and pension payments, then found themselves hit with huge tax bills by HMRC. She has said it has caused some staff extreme distress after receiving huge tax bills.
“It’s a really sad situation,” said Kershaw. “I have no axe to grind, as when I was told to set up a company in 2018, I refused. I asked an accountant and employment lawyer for advice before this and he said they said it was inappropriate and not to my advantage.”
The depth of upset among BBC stars, as well as how much money was at stake, came to light in 2018. The Times published a letter sent to presenters from former BBC deputy director-general Anne Bulford, apologising for the “hurt and angst” caused by this tax arrangement.
The paper reported that between 2014 and 2018, the broadcaster’s 66 richest stars had put their £74m earnings through these company structures, in a move that could have enabled the avoidance of as much of £20m in tax.
The arrangement landed many staff in hot water with HM Revenue & Customs from 2018, with the taxman arguing they should have been directly employed, and paying more tax.