BBC tax 'loophole' closed: 124 top stars paid as freelances hit by ruling

A BBC review ruled many of the celebs must now be offered staff contracts so they can be taxed as individuals.

Overhaul: Jeremy Paxman gets salary through private firm

BBC

A potential tax dodge which may have been used by top BBC stars including Jeremy Paxman was shut down by bosses yesterday.
The suspected loophole was linked to at least 100 of the corporation’s high earners who are employed as freelances and paid through their own private companies.
But a BBC review yesterday ruled many of the celebs must now be offered staff contracts so they can be taxed as individuals.
The overhaul will hit 124 stars paid over £150,000 a year and potentially cost them huge sums.
Chris Moyles and Fiona Bruce are thought to be among them.
Robert Oxley, of The Taxpayers’ Alliance, said: “It’s absolutely right that BBC stars are paid as employees like anyone else in any office would expect.
"It doesn’t look good to hard-pushed taxpayers that faces of the nation’s broadcaster were potentially avoiding tax.”
The BBC’s review yesterday concluded no evidence of a policy of tax avoidance.

Links to firm: Fiona Bruce

BBC

 But it found “a number of individuals” in top positions in the corporation were engaged with Personal Service Companies when they would be expected to be employees.
The Beeb will now scrutinise the freelancers it uses and review the terms of their employment.
It will pay close attention to the 469 staff on over £50,000 a year who use PSCs to be paid their salary.
The corporation, which has 22,013 staff, estimated 131 individuals will be offered staff contracts in the near future.
BBC trustee Anthony Fry said: “If someone clearly has the characteristics of being an employee, there will not be exceptions because someone is a big talent.”
Newsnight host Paxman claims he was advised by the BBC to set up a company to receive his payments.
Documents show his firm, Out in the Dark Limited, received £92,077 during 2011, a reduction from £239,411 in the previous 12 months.
Ousted Radio One DJ Moyles signed a £1million deal last July and runs Saviour Productions.
Presenter Bruce is linked to two service firms and is thought to earn about £500,000.

How big-name presenters may be hit: Analysis by Graham Hiscott

BBC stars could be hundreds of thousands of pounds poorer because of the rule change.
Registering as a Personal Service Company means they aren’t taxed as individuals.
Richard Murphy, of Tax Research UK, says this lets people on £1million pay 45p in the pound, leaving them with £550,000 take-home pay.
But now the Beeb will either have to pay 13.8% national insurance or dock their pay by £138,000.
Given that it won’t want to increase its bills, the second option is likelier.
But if it goes for it, it will also have to pay employee national ­insurance and income tax.
That leaves wages of around £430,000 – still a hefty packet, but £120,000 a year less than under the current system.