U.K. Parliament Report: BBC Pay Scheme Helps On-Air Stars Avoid Taxes
LONDON - A report from a U.K. parliamentary committee says that the BBC is helping thousands of employees, including about 1,500 on-air hosts, news readers, actors and other talent, avoid tax payments, according to the Daily Telegraph.
The Public Accounts Committee suggests that the public broadcaster is “complicit” in tax avoidance as it allows people to be paid as companies rather than individuals, it said. The arrangement allows both the BBC and the employees to pay lower taxes.
The BBC now acknowledges that about 1,500 on-air contributors, actors and others are paid under such freelance-style contracts, up from its previous estimate of 300, the Telegraph said. It highlighted that this figure includes the company's "best-known television and radio stars," but the report didn't mention specific names.
Newsnight host Jeremy Paxman for one recently said that the BBC asked him to set up a company or risk losing his role.
Overall, it has emerged that the BBC has 25,000 freelance contract arrangements. It acknowledges that it does not know if these freelancers are paying their taxes properly.
Margaret Hodge, the chairman of the Public Accounts Committee, told the Telegraph: “I want the BBC to stop and call a halt to what is completely unacceptable use of tax avoidance schemes...The BBC’s revenues are from hard earned taxes from ordinary families and they have a duty to lead by example – they have a double duty to be cleaner than clean."
The BBC had told her committee that the use of freelance workers is “a pretty standard model” in media and “important to the economics of the BBC."
The paper quoted the BBC as saying about the committee report: “We note the conclusions of the PAC report and will respond to the points raised as part of our detailed review of tax arrangements.”