MPs “shocked” by BBC tax arrangements

by Calum Fuller

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05 Oct 2012

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POLITICIANS in the Public Accounts Committee have expressed grave concerns that the BBC employs 25,000 people who do not pay tax at source.

The cross-party committee, chaired by Labour MP Margaret Hodge, said it was "shocked" at the scale of the practice, under which individuals must make their own tax and national insurance payments.

The figure includes about 13,000 on-air television and radio ‘talent', with a further 12,000 off-air staff. About 3,000 are paid via private companies which could potentially allow them to reduce their tax liabilities.

Hodge said the arrangements raised "suspicions of complicity in tax avoidance".

The committee has been analysing tax avoidance following controversies relating to senior public sector office holders and their employment status.

Initially, it was reported Student Loans Company boss Ed Lester was being employed through a personal service company with no tax deducted, before it emerged that about 2,400 senior public staff earning more than £58,200 per year were engaged in a similar way.

Following those disclosures, Treasury secretary Danny Alexander pledged in May that civil servants earning more than £220 per day for more than six months would be required to demonstrate their taxes are in order and obliged to move onto the payroll or terminate their contracts.

But Hodge felt the Treasury's review was narrow as it did not pertain to departments such as the NHS, local government and the BBC.

She said: "The public sector must itself maintain the highest standards of propriety in its employment practices if it is to show leadership in the fight against tax avoidance.

"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 broadcaster told the committee the 25,000 staff in question were freelance workers, with the arrangements a "standard model" in the media industry, but added it is conducting a review of the situation.

The committee, though, said in a report today that the BBC cannot currently provide "any assurance" that those workers are paying the appropriate tax.

"Although the BBC told us it provides information on its off-payroll arrangements to HM Revenue & Customs, it has no means of ensuring that its freelancers are paying the right amount of tax," it said.

"The [BBC's] review should set out how it will gain assurance that its staff pay the right level of income tax and national insurance on their income."

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