BBC EXECUTIVES will be asked to divulge presenters and other high-profile figures potentially participating in tax avoidance by being engaged through private companies, when they are called before MPs next week.
The Commons Public Accounts Committee will question the BBC after a Treasury review found that about 2,400 civil servants earning more than £58,200 a year were paying corporation tax instead of higher rate tax by working as off-payroll consultants, reports the Financial Times.
Being paid in this way is not illegal, but is seen as inappropriate for people holding public office, where the employer does not make national insurance payments.
Danny Alexander, chief secretary to the Treasury, has already vowed to rein in the practice after he conducted a review that found more than 2,000 public officials were being paid in this way.
Labour MP Margaret Hodge, chairwoman of the committee, is concerned that BBC staff, paid via the licence fee, should have their tax affairs scrutinised.
The BBC’s CFO, Zarin Patel, and its head of employment tax, David Smith, will face questions over their staff on Monday.
A Freedom of Information request in 2011 found five BBC staff earning more than £150,000 were remunerated through personal service companies, while 36 on more than £100,000 were paid in the same way. In total, 300 BBC staff are paid using the method.
Although freelancers working for several organisations are legitimately using the mechanism, MPs are concerned higher earners are using it for tax avoidance reasons.
“If you earn your wage on the back of the taxpayer – and they do, in effect, because they get their money from the licence fee – you have a moral imperative to lead by example,” said Hodge.
She added: “If the pure motive of this is for the BBC to avoid paying its contributions under NICs, then that’s just not on.”
The BBC said its use of service companies to pay on-air talent afforded both parties flexibility on how they worked together.
A spokesman said BBC contracts “stipulate that talent must pay the appropriate amount of the tax” and that it “provides HMRC with a detailed annual report of all payments made to such companies”.
Does Darwin's theory apply to taxation? Colin ponders...
The UK tax gap fell in 2014-15 to its lowest-ever level of 6.5%, revealed official statistics published today
Changes to the tax system is urged to support the growth of entrepreneurs, found a report from the Grant Thornton UK, the Institute of Directors, and the Prelude Group
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states