Former BBC presenter loses legal battle over tax bill

A former BBC presenter is facing a tax bill that could reach more than £400,000 after losing a dispute with HM Revenue & Customs, a tribunal ruled.

Christa Ackroyd, who presented BBC Look North for more than a decade, was in a legal battle with HMRC who claim she owes £419,151 in unpaid tax between 2008 and 2013.

Ms Ackroyd, who contends the sum stands at approximately £207,000, was employed under two fixed term contracts between the BBC and her personal service company, Christa Ackroyd Media Ltd (CAM).

HMRC considered her an employee of CAM and that therefore the company was liable to pay income tax and national insurance, while Ms Ackroyd argued she was a self-employed contractor.

The tribunal said Ms Ackroyd's was one of a "number of other appeals involving television presenters and personal service companies".

It stressed that HMRC had "never suggested" Ms Ackroyd was a tax cheat or had acted "in any way dishonestly".

In its ruling for HMRC, which the tribunal acknowledged was a "value judgment", it said: "We do not criticise Ms Ackroyd for not realising that the IR35 legislation was engaged.

"She took professional advice in relation to the contractual arrangements with the BBC and she was encouraged by the BBC to contract through a personal service company."

A BBC spokesman said the use of personal service companies was "entirely legitimate and common practise across the industry".

He said: "The BBC was not party to this case, and as was standard industry practice at the time the individual was engaged as a freelancer in 2001 and paid via their existing company.

"Until last year it was for individuals with service companies rather than those engaging them to determine their status for tax purposes.

"The use of personal service companies is entirely legitimate and common practice across the industry as it provides flexibility for both individuals and organisations.

"An independent review conducted in 2012 found that there was no evidence that the BBC had attempted to avoid income tax or NIC by contracting in this way."

An HMRC spokesperson said: "Employment status is never a matter of choice; it is always dictated by the facts and when the wrong tax is being paid we put things right."

Both parties must agree the amount to be repaid or notify the tribunal within 42 days of the need for a further ruling.

Read Full Story