BBC contracts raise 'suspicions of complicity in tax avoidance'
Public broadcaster admits 4,500
individuals are paid through
companies, allowing them to
reduce tax contributions
THE BBC has been singled out for
criticism by MPs investigating the
tax arrangements of public sector
workers. The broadcaster and
other employers have been accused of using a system to pay staff "which generates suspicions of complicity in tax a
voidance".
criticism by MPs investigating the
tax arrangements of public sector
workers. The broadcaster and
other employers have been accused of using a system to pay staff "which generates suspicions of complicity in tax a
voidance".
The Public Accounts Committee found that the BBC has issued 25,000 so-called "off-payroll" contracts, under which
tax is not deducted at source. 13,000 of these contracts are for people who appear on our screens. Reports suggest
they includeNewsnight presenter Jeremy Paxman and Antiques Road Show presenter Fiona Bruce.
tax is not deducted at source. 13,000 of these contracts are for people who appear on our screens. Reports suggest
they includeNewsnight presenter Jeremy Paxman and Antiques Road Show presenter Fiona Bruce.
The BBC admitted last night that 4,500 contributors were paid through personal service companies, including 1,500
who appear on camera such as presenters and actors.
who appear on camera such as presenters and actors.
Employees on such contracts are not paid through the BBC payroll, but rather through companies set up in their
name. The Daily Telegraph explains that this arrangement "allows the recipient to pay corporation tax of 21 per cent
on their firm's earnings, rather than income tax of up to 50 per cent, saving thousands of pounds a year". The paper
notes that the system also allows the BBC to avoid paying National Insurance contributions for these employees.
name. The Daily Telegraph explains that this arrangement "allows the recipient to pay corporation tax of 21 per cent
on their firm's earnings, rather than income tax of up to 50 per cent, saving thousands of pounds a year". The paper
notes that the system also allows the BBC to avoid paying National Insurance contributions for these employees.
Paxman has previously insisted he was "required" by the BBC to form a company, the Daily Mail reports. He said
the corporation "claimed it had been told to do so" by the taxman. Bruce also said she was forced to be paid through
a company.
the corporation "claimed it had been told to do so" by the taxman. Bruce also said she was forced to be paid through
a company.
The Chairman of the Public Accounts Committee, Labour MP Margaret Hodge said: "Avoiding tax and national
insurance arrangements when paying public sector staff is almost always staggeringly inappropriate.
insurance arrangements when paying public sector staff is almost always staggeringly inappropriate.
"The public sector must maintain the highest standards of propriety in its employment practices if it is to show
leadership in the fight against tax avoidance.
leadership in the fight against tax avoidance.
"It must avoid the practice of using off-payroll arrangements for staff - which generates suspicions of complicity
in tax avoidance and which fails to meet the standards expected of public officials. "Those whose income is derived
from monies raised through taxation have a particular obligation to make sure that they do not use tax avoidance
schemes."
in tax avoidance and which fails to meet the standards expected of public officials. "Those whose income is derived
from monies raised through taxation have a particular obligation to make sure that they do not use tax avoidance
schemes."
The BBC said: "We note the conclusions of the PAC report and will respond to the points raised as part of our
detailed review of tax arrangements."
detailed review of tax arrangements."
But the corporation pointed out that the actual number of people being paid off-payroll was less than it looked
: "In many cases an individual - such as an occasional contributor to programmes - could be issued with a contract
each time he or she is booked to appear." ·
: "In many cases an individual - such as an occasional contributor to programmes - could be issued with a contract
each time he or she is booked to appear." ·
Read more: http://www.theweek.co.uk/business/49398/bbc-contracts-raise-suspicions-complicity-tax-avoidance#ixzz28RsPG42X
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