BBC to stump up £12m for stars’ tax bills

After making staff set up companies...

THE BBC set aside £12 million to help settle the historical tax bills of presenters – even though its own auditor called the payments ‘irregular’.

The corporation’s annual report revealed the sum has been taken out of the licence fee to pay much of the money the presenters owe the taxman, in a bid to draw a line under a long battle with HM Revenue & Customs.

The amount is controversial at a time when the BBC is stripping free Tv licences from 3.75million people over 75. The £12million would pay 77,000 licence fees, at £154.50 each.

The BBC already faces criticism for increasing its salary bill for presenters by £11 million last year. its total staff bill increased by £83 million to £1.48 billion.

Hundreds of BBC presenters owe the taxman large sums because the broadcaster pressured them to set up personal services companies (PSCs) so they could be treated as freelancers. The arrangement enabled the BBC to save millions in national insurance contributions, as well as the cost of sick pay, holidays, pension contributions and other staff entitlements.

Presenters paid directly by the broadcaster have to pay income tax at a rate of up to 45 per cent, whereas PSCs have to pay corporation tax at only 19 per cent.

But it left many workers facing demands for unpaid tax, after HMRC ruled they should never have classified themselves as self-employed.

Some presenters have been left owing hundreds of thousands of pounds. Former Look north presenter Christa ackroyd, 61, was ordered to pay £420,000 after losing a case against HMRC last February.

Details of the amount earmarked to settle the cases were revealed in the annual accounts published on Tuesday.

The national audit Office, the BBC’s auditor, said the £12million was ‘irregular’ as the BBC was not liable for the money.

But the payments were still approved by the board, led by chairman Sir David Clementi and director-general Lord Hall of Birkenhead.

‘The board considers that a settlement option with either HMRC or individual presenters is in the best interests of the BBC, the licence fee payer, and the individuals involved,’ the accounts noted.

‘The board acknowledges that this provision of £12 million is considered irregular because the BBC does not have a strict legal liability for the tax owed.

‘notwithstanding this, as the BBC’s authorising body, the board weighed up the issues and made the decision to approve the approach and expected cost on the basis that it offers the best value for money of the available settlement options.’

Several of the presenters affected are highly paid household names. it is not known if HMRC is pursuing Claudia Winkleman and Chris evans, but both broadcasters have received part of their BBC pay via PSCs.

However, thousands of others are small-time presenters who faced having to sell their homes to settle their bills. The broadcaster spent years denying responsibility for the debacle, and only recently apologised to its workers for pushing them into the PSCs.

glyn isherwood, chief financial officer at the BBC, said: ‘We continue to work to resolve historic tax issues faced by our onair presenters related to their employment classification.

‘The BBC recognises there’s a part to play in resolving this.’