Christa Ackroyd tax case could affect "hundreds" of BBC presenters

Stephen Chapman's picture

Former BBC Look North presenter, Christa Ackroyd has lost a legal battle with HM Revenue & Customs at the Royal Courts of Justice.

The ruling could have wider implications because of the way some presenters were paid by the BBC.

When Ackroyd left ITV Calendar for BBC Look North she was given a personal service company contract. This means that rather than being employed directly by the corporation, she was paid as a freelancer, with the money going to her own company, Christa Ackroyd Media Ltd. This meant that she was effectively self-employed.

The HMRC stressed that they were not and never had accused Ackroyd of either being a tax cheat or acting dishonestly.

Indeed, according to court documents, it was the BBC who suggested that this is how she should be paid. It was earlier ruled that the BBC hadn’t attempted to avoid income tax or National Insurance contributions by acting in this way and a spokesperson said that, at the time, it was “entirely legitimate and common practice” in the media sector.

What it means for Ackroyd is a potential tax bill of around £420k - a sum she disputes, suggesting it is nearer £207k.

The former BBC presenter said after the ruling that it had ended “5 horrendous years of innuendo and gossip” about her financial affairs.

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Ackroyd was sacked from Look North in 2013 for a “breach of contract” but no details of why were released at the time.

"We do not criticise Ms Ackroyd for not realising that IR35 legislation was engaged,” said the HMRC.

"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."

The ruling by the tribunal is the first time that the HMRC has won an IR35 case in 7 years. IR35 legislation governs tax, which is paid by those working for clients through an intermediary.

In the tribunal Ackroyd said she believed that she was a self-employed contractor of her company, CAM. However, HMRC argued that she was an employee of CAM and therefore the company was liable for income tax and national insurance.

Ackroyd’s case is not unique, with around 100 other presenters being investigated over similar issues.