Tax Avoidance of the BBC now revealed

BBC complicity in tax avoidance revealed

Sat Oct 6, 2012 3:1PM GMT

The British Broadcasting Corporation (BBC) is accused of complicity in tax avoidance for thousands of its employees and some of its biggest household names.

The British House of Commons Public Accounts Committee (PAC) discovered the broadcaster’s complicity in staff tax avoidance with about 25,000 off-payroll contracts. According to new evidence, 13,000 of the contracts are for individuals who are on screens and on the radio every day with another 12,000 off-air staff.

Reports have suggested that newsreaders such as Fiona Bruce, Joanne Gosling, Emily Maitlis, Gavin Esler, Sophie Raworth as well as radio broadcaster Chris Evans and Newsnight presenter Jeremy Paxman are all paid in this fashion. Paxman has claimed that he had been told by the BBC to set up a company for his earnings or stop presenting the Newsnight.

Technically, tax avoidance is the legal utilization of the tax regime to one’s own advantage in order to reduce the amount of tax that is payable by means that are within the law.

The revelations come as according to new data the BBC could not provide evidence that these individuals are paying the appropriate amount of tax.

In another blow to the BBC’s reputation, it is now evident that the number of such contracts, which are related to the corporation’s best known television and radio stars, is far higher than it was announced by the channel. The recently disclosed figures by the corporation were 300 while the real number of contracts reaches to staggering 1500.

The BBC also avoids paying National Insurance Contributions when paying employees this way.

Meanwhile, the broadcaster, which receives £3.6 billion a year from license fee payers, has defended its role in tax avoidance controversy, claiming that the arrangements were “a pretty standard model” in the media industry and “important to the economics of the BBC.”

The new revelation has brought the big corporations tax avoidance back to the spotlight and sparked furious reactions. In an online poll conducted by the Daily Telegraph, the respondents are asked whether they are willing to tolerate the BBC paying staff off books if it reduces the corporation’s tax bill. An outright majority (81.17%) have slammed the idea even if it results in the reduction of compulsory license fee.

Senior MPs also warn that the BBC is not the only suspected tax avoider, stressing that the Committee is still suspicious that many other individuals and employers in the health service sector and local governments are not paying their taxes and National Insurance contributions.

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