Claims that the BBC has sought to reduce its tax contributions by requiring some employees to set up personal service companies (PCSs) are "misleading", the broadcaster’s CFO has said.
In an email to staff at the taxpayer-funded broadcaster, Zarin Patel refuted suggestions that thousands of workers had been told "to go 'off the books’ in order to cut our tax bill".
She also denied that the BBC was "avoiding national insurance contributions". She said that the BBC would review its tax arrangements in an effort to “reassure licence fee payers that all of our arrangements are functioning correctly and appropriately".
A report in the Times has claimed that newsreaders Fiona Bruce and Emily Matlis are also thought to be employed through PSCs.
The newspaper reported that "several presenters are furious that they have been subjected to questions about their integrity as a result of a BBC decision that they claim they strongly resisted".
Patel's email followed her appearance earlier this month before the Commons Public Accounts Committee (PAC).
The chair of the public spending watchdog, Margaret Hodge, said she had heard from one long-term presenter who had been employed by the BBC for more than 20 years, who said he had to go "off books into a service company" or he would not be employed.
Patel said that that situation would be “totally unacceptable” and would look into the claim.
The committee focused on the distinction between full-time employees and freelancers who work regularly for the BBC and who, it is claimed, can use PSCs to lower their tax bills by not paying NICs.
Patel told MPs that of 467 presenters, 148 are on long-term contracts through service companies. She said that the BBC did not try to avoid tax.
She also said that IR35 legislation, which stops employers masquerading as contractors, including by using PSCs, would prevent people from using PSCs to avoid paying tax and national insurance contributions.
“In my judgment, the IR35 anti-avoidance legislation is very strongly crafted, so that if you work through a service company, on an employment-type contract or quasi-employed, you will pay the same amount of tax.”
HMRC is consulting on proposals to tighten IR35 compliance by requiring organisations engaging “controlling persons” through PSCs to deduct income tax and NI from fees paid to their companies.
In an email to staff at the taxpayer-funded broadcaster, Zarin Patel refuted suggestions that thousands of workers had been told "to go 'off the books’ in order to cut our tax bill".
She also denied that the BBC was "avoiding national insurance contributions". She said that the BBC would review its tax arrangements in an effort to “reassure licence fee payers that all of our arrangements are functioning correctly and appropriately".
A report in the Times has claimed that newsreaders Fiona Bruce and Emily Matlis are also thought to be employed through PSCs.
The newspaper reported that "several presenters are furious that they have been subjected to questions about their integrity as a result of a BBC decision that they claim they strongly resisted".
Patel's email followed her appearance earlier this month before the Commons Public Accounts Committee (PAC).
The chair of the public spending watchdog, Margaret Hodge, said she had heard from one long-term presenter who had been employed by the BBC for more than 20 years, who said he had to go "off books into a service company" or he would not be employed.
Patel said that that situation would be “totally unacceptable” and would look into the claim.
The committee focused on the distinction between full-time employees and freelancers who work regularly for the BBC and who, it is claimed, can use PSCs to lower their tax bills by not paying NICs.
Patel told MPs that of 467 presenters, 148 are on long-term contracts through service companies. She said that the BBC did not try to avoid tax.
She also said that IR35 legislation, which stops employers masquerading as contractors, including by using PSCs, would prevent people from using PSCs to avoid paying tax and national insurance contributions.
“In my judgment, the IR35 anti-avoidance legislation is very strongly crafted, so that if you work through a service company, on an employment-type contract or quasi-employed, you will pay the same amount of tax.”
HMRC is consulting on proposals to tighten IR35 compliance by requiring organisations engaging “controlling persons” through PSCs to deduct income tax and NI from fees paid to their companies.
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