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Friday, 16 February 2018

Christa Ackroyd: Not Smiling Any More

Former BBC Yorkshire presenter Christa Ackroyd has been ordered to pay almost £420k in back taxes after a landmark Tribunal ruling.

Ackroyd, who previously co-anchored regional news programme Look North alongside Harry Gration, worked for the BBC on a freelance basis. Her £163k salary was paid via her personal services company, Christa Ackroyd Media (CAM) Ltd, which attracted a more favourable rate of tax than had she been directly employed by the BBC. We should stress that there is no suggestion that Ackroyd has committed a crime or acted dishonestly.

The 60-year-old presenter fronted Look North between 2001 and 2013, which required her to spend several hours every weekday at work for the BBC. According to the judgment the BBC refused to formally employ Ackroyd, because it was apparently reluctant to accept PAYE and National Insurance liability for her work on Look North.

As a workaround, the BBC suggested that she should be engaged via a personal services company. Ackroyd was unfamiliar with such a system of work, but her accountant confirmed that everything was in order. A contract for Ackroyd's services was drawn up between the BBC and CAM.

HMRC began investigating CAM's finances at the start of 2011. HMRC contacted the BBC to establish its working relationship with Ackroyd which, according to her, left the BBC doubting her integrity.

Prompted by HMRC's advances, the BBC started to take a much keener interest in Ackroyd's CAM contract of employment. Until that point the BBC had adopted a rather loose management style, which afforded the Bradford-born presenter a degree of autonomy. By mid-2013, with HMRC matters coming to a head, Ackroyd was axed by the BBC for breach of contract.

In the opinion of HMRC, which is supported by last week's judgment, Ackroyd was an employee of CAM and should have been paying income tax and National Insurance accordingly. Ackroyd's stance, perhaps not surprisingly, was somewhat different. She identified herself as being a self-employed contractor of CAM, which attracted certain tax benefits over being an employee.

Fascinating as Christa Ackroyd's tax affairs might be, the thing that strikes us is how the BBC encouraged her to adopt a routine that short-changed the taxpayer. We would also highlight a few other interesting revelations from the Tribunal judgment:
  • that Ackroyd received a £40k ex-gratia payment for agreeing to work exclusively for the BBC; 
  • that she received a £3k annual clothing allowance on top of her £163k salary; 
  • that she was eligible for a £7.5k bonus every six months if the ratings of Look North consistently and significantly exceeded those of Calendar (ITV's regional news programme).
Ackroyd was paid this £7.5k bonus on every occasion during her BBC employment.

There are around one hundred of these cases rumbling on at the moment. It'll be interesting to see if the BBC is routinely encouraging its "talent" to use creative workarounds in order avoid tax.

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