The National Audit Office (NAO) and HMRC have launched around 100 investigations into personal service companies (PSCs) linked to the BBC on suspicion of tax avoidance.
According to The Guardian, around 800 BBC TV and radio presenters face scrutiny over their employment status after the state broadcaster was accused of dodging millions in national insurance contributions.
Around 300 presenters, who were hired through PSCs, accused the BBC of forcing them to establish special tax vehicles which resulted in a loss of holiday and sick pay and pension contributions.
Some of the outstanding bills amount to thousands of pounds, according to the NAO.
The news comes after HMRC won a landmark case in February, resulting in over 100 BBC presenters facing substantial tax bills.
Among those who claimed they were ordered to create tax-dodging arrangements were Front Row presenter Kirsty Lang, DJ Liz Kershaw and Radio 4’s Money Box presenter Paul Lewis, all of whom made the allegations to parliament in March.
The NAO states that PSCs ‘are a legitimate way of contracting for services and are commonplace across many sectors’ but can cause less tax to flow to the Treasury as a result of individuals not paying what they owe.
The investigation will explore why problems have surfaced now and the scale to which they have risen, how the BBC has used PSCs, and the relationship between the BBC and HMRC.
Tax lawyer Miles Dean, managing partner of Milestone International Tax, reaffirmed the legitimacy of PSCs, but warned problems come from workers crossing the line from freelancers to employees.
He said: 'The point is that if the individuals in question were in fact freelancers – and therefore self-employed – there is nothing wrong at all with the BBC paying their personal service companies.
'The problems arise when the individual is not a freelancer and the majority, if not all, of their time is spent under the control and direction of the BBC, meaning they are in fact employees.'
PSC usage by the BBC was first investigated in 2012 by the Committee of Public Accounts.
In July, The Times revealed that freelancers using tax avoidance schemes were commanded to pay back £1 billion after 20,919 contractors told HMRC they use offshore umbrella schemes to shield income tax and NI liabilities from the Exchequer.
Last year, chancellor Philip Hammond identified ‘disguised employment’ in the private sector as a problem after HMRC voiced concern that PSCs such as IT contractors and journalists were being used to dodge tax.