Editorial: MPs are right – the BBC must put its tax house in order


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The Independent Online

Back in 1993, The Independent on Sunday revealed the unorthodox tax arrangements enjoyed by the then BBC director-general. John (now Lord) Birt had his salary paid into a private company, which allowed many of his costs, including suits, to be tax-deductible. When a public outcry ended that arrangement, licence-payers might have assumed that any similar arrangements lower down the corporation were ended, too. Almost the opposite seems to have happened. MPs have found that – 19 years later – the BBC has 25,000 such contracts, more than half of which benefit those regularly on air.

Where the individuals concerned work for several organisations, this arrangement can be justified, but not where the beneficiaries are the public faces of the BBC. Legal such contracts may be, but they set up an artificial distinction between BBC employees and offer financial advantages – including to the corporation, which does not pay National Insurance for those not paid as "staff". The BBC says it is reviewing the situation. The Public Accounts Committee chairman, Margaret Hodge, said: "Avoiding tax and National Insurance when paying public sector staff is almost always staggeringly inappropriate. The public sector must maintain the highest standards of propriety in its employment practices." Well said.