By Martin Kelly
The BBC Trust is coming under pressure to reveal the contents of emails that could show that the corporation knowingly provided its top presenters with an opportunity to avoid paying tax.
According to the Times newspaper, a row is brewing after Anthony Fry, chairman of the BBC Trust’s finance committee, rejected a request from the House of Commons Public Accounts Committee to disclose the internal BBC e-mails.
It is also being reported that Mr Fry, despite being questioned about the emails, has refused to read them. MPs on the Committee are now demanding the emails be published.
The row follows anger after it emerged that the BBC had been using a system of payment for many top stars and presenters that allowed the stars to avoid paying tax.
The BBC has already admitted that emails contain evidence that the corporation’s own tax advisers were consulted in relation to payments to top earners. The admission followed an investigation by financial consultants Deloitte, who found evidence that the corporation had taken into account a “range of tax outcomes” for two people who were paid via so called ‘personal service companies’.
In October 2012, newspaper reports claimed that up to 25,000 BBC employees, including 13,000 broadcasters, had escaped paying income tax and national insurance after using a freelance method of payment. Included in the figure was around 4500 high-earners, including 1,500 ‘on-screen’ presenters, contributors, actors, musicians and commentators, who received payments through the personal service company method.
The revelations that individuals were paid as though they were companies rather than staff brought stinging criticism from the committee of MPs who accused the corporation of being “complicit” in the tax avoidance scheme.
The revelations emerged following a tip off in July after Conservative MP, Daniel Kawczynski revealed he had been contacted by a University friend angry about the practice.
According to Mr Kawczynski, the BBC had ordered freelance staff earning more than £10,000 a year to invoice through a third-party company so the corporation could avoid paying national insurance contributions.
Following the claims, an internal review was held by the BBC which found that there were individuals who were paid as though freelancers but who shared “many characteristics with other individuals who are BBC staff.” The review also revealed that HMRC would have had no way of knowing if the correct amounts of tax had been paid.
Those involved are thought to contain many high profile newsreaders and presenters from the BBC’s news departments across the UK, including BBC Scotland.
In a response to the review, the BBC Trust said: “The BBC will introduce a more specific employment test to ensure that if an individual clearly displays the characteristics of an employee, he or she will be engaged as staff with tax and National Insurance deducted at source rather than through a service company.”
It added: “As a matter of priority, the new test will be applied to the cases identified by Deloitte where the employment status of an individual looks unclear. If the individual has the characteristics of an employee, the BBC will aim to transfer the individual to an employment contract as soon as contractually practicable.”
However it remains unclear if and when existing contracts will be altered to eliminate the possibility of tax avoidance. There are also concerns over the implications of non-staff in relation to the BBC’s own charter which covers corporation employees.
Speaking to the Times, Richard Bacon, a Conservative member of the Public Accounts Committee, said that Anthony Fry should read the e-mails immediately and take action on any evidence of impropriety.
“He can’t put his head in the sand on this. It’s his responsibility to check these things out properly and, if things are not in order, act accordingly.
“The e-mails should also be published because sunlight is the best disinfectant. Public trust has fallen in the BBC and the best way to restore it is to be open.”