BBC's 'big talents' made staff after claims of 'tax avoidance'
Published 07/11/2012 | 15:30
MORE than 100 of the BBC's most famous presenters will be forced to give up freelance contracts that could allow them to cut their tax bill, the Corporation has said.
The changes come as the corporation tries to answer allegations that it helps its employees avoid paying tax.
The BBC has admitted paying more than 6,000 freelance workers who register themselves as “personal service companies”, meaning they can be taxed as companies not individuals.
It has been reported that they include some of the BBC’s most well-known broadcasters, including newsreaders Fiona Bruce, Joanne Gosling, Emily Maitlis, Gavin Esler and Sophie Raworth.
MPs on the public accounts committee last month accused the BBC of having “staggeringly inappropriate” arrangements in place for many of its staff and said it could be “complicit” in tax avoidance.
The broadcaster commissioned a review of its freelance arrangements by accountants at Deloitte, whose findings have today led the corporation to establish new rules for handling the employment of BBC workers.
Deloitte found that of 6,123 contracts where the BBC pays individuals as if they were companies, 804 should be urgently reviewed.
Those 804 contracts are with "on-air talent" who are paid more than £50,000 for their work.
Having reviewed those contracts, the BBC said that 131 people will be moved onto staff contracts when their current freelance deals expire.
The BBC declined to discuss the individuals affected, but the Deloitte review makes clear they include some of the most famous and highly-paid presenters on television and radio.
There is no suggestion that any of the presenters has broken any tax rules in their dealings with the BBC.
Anthony Fry, a member of the BBC Trust, said that the stars affected will have no choice but to accept staff contracts. He said: "Will we allow exceptions? We will not. There will be no exceptions because someone is a big talent."
Zarin Patel, the BBC’s finance director, insisted that the Deloitte report showed "no evidence" that the BBC was party to tax avoidance.
However, she admitted that stars using personal service companies could reduce their tax bill by writing off up to 5 per cent of their income as "management expenses". The use of such arrangements "give the public the perception that individuals can avoid tax," she said.
Jeremy Paxman, the Newsnight presenter, claimed earlier this year that he had been told by the BBC that he had to set up a company to receive his earnings from the corporation.
Ms Patel insisted the BBC had done nothing wrong by pushing some workers to register themselves as companies in ealier years.
People registered as personal service companies can also pay corporation tax of 21 per cent on earnings. Individuals paid under the PAYE tax system incur income tax of up to 50 per cent.
James Kirkup, Telegraph.co.uk