The BBC attended a commons committee hearing this week after the government decided to look into cases of public sector organisations using ‘off payroll’ schemes for some staff. This followed a wider HMRC clampdown on tax avoidance and evasion.
Zarin Patel, chief financial officer at the BBC, attended the hearing on Monday to provide evidence. She confirmed that 148 of the BBC’s presenters are paid through personal service companies, saving tax and national insurances contributions and overall reducing their overall tax.
Ms Patel stated that this practice did not occur to avoid tax, but was simply an industry norm. She continued, saying the BBC will be reviewing their methods; “With the amount of public concern expressed today, I think I have to say yes, we will review it, and we will review it with real seriousness. But can I emphasise that none of this is designed to avoid tax. That is not why we use an extensive number of freelance contracts at the BBC.”
It was reported last week that around 3,000 BBC workers were thought to operate through PSC’s, with a small number of them earning over £100,000 a year. Labour MP Margaret Hodge chaired the committee and was quite hard hitting in her criticism of the BBC, mainly stating that as they are funded by the taxpayers it is immoral that they avoid paying tax.
Ms Hodge said she was made aware of a long term BBC presenter who had been employed for more than 20 years, and was told they would face a substantial pay cut if they didn’t go “off books into a service company”. Ms Patel could not confirm this but said that all these cases would be thoroughly reviewed.
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