This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/uk-19839836
The article has changed 5 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| MPs voice concerns about 'off payroll' tax arrangements | MPs voice concerns about 'off payroll' tax arrangements |
| (about 5 hours later) | |
| The tax arrangements of some public sector workers - including thousands at the BBC - have been criticised by MPs. | The tax arrangements of some public sector workers - including thousands at the BBC - have been criticised by MPs. |
| The Public Accounts Committee says too many make their own arrangements to pay tax and national insurance, which could allow them to contribute less. | The Public Accounts Committee says too many make their own arrangements to pay tax and national insurance, which could allow them to contribute less. |
| It said it was shocked to find the BBC had 25,000 such "off payroll" contracts - 13,000 for people who were on air. | It said it was shocked to find the BBC had 25,000 such "off payroll" contracts - 13,000 for people who were on air. |
| The BBC said many of these were short-term contracts and that it was reviewing these tax arrangements. | The BBC said many of these were short-term contracts and that it was reviewing these tax arrangements. |
| The committee began its inquiries into so-called off payroll contracts after it emerged earlier this year that the former head of the Student Loans Company was being paid via a company. | The committee began its inquiries into so-called off payroll contracts after it emerged earlier this year that the former head of the Student Loans Company was being paid via a company. |
| The arrangement - agreed by the tax authorities - potentially saved Ed Lester tens of thousands of pounds in tax. | The arrangement - agreed by the tax authorities - potentially saved Ed Lester tens of thousands of pounds in tax. |
| It triggered a Treasury investigation across the government - which revealed that for more than 2,400 civil servants, tax was not being deducted when their wages were paid, through PAYE. | It triggered a Treasury investigation across the government - which revealed that for more than 2,400 civil servants, tax was not being deducted when their wages were paid, through PAYE. |
| 'Disguised employment' | |
| Public Accounts Committee chairman Margaret Hodge said: "It was... shocking to find out that no fewer than 2,400 central government appointees were benefiting from off payroll arrangements. | Public Accounts Committee chairman Margaret Hodge said: "It was... shocking to find out that no fewer than 2,400 central government appointees were benefiting from off payroll arrangements. |
| "Furthermore, the Treasury Review only covered civil servants. Tax avoidance in the public sector goes much wider. | "Furthermore, the Treasury Review only covered civil servants. Tax avoidance in the public sector goes much wider. |
| "We were shocked, for example, to discover that the BBC has about 25,000 off payroll contracts. 13,000 of these are for individuals who are on our screens and on the radio every day. They are the public face of the BBC." | "We were shocked, for example, to discover that the BBC has about 25,000 off payroll contracts. 13,000 of these are for individuals who are on our screens and on the radio every day. They are the public face of the BBC." |
| The Labour MP said avoiding tax and national insurance when paying public sector staff was "almost always staggeringly inappropriate." | The Labour MP said avoiding tax and national insurance when paying public sector staff was "almost always staggeringly inappropriate." |
| She said: "The public sector must maintain the highest standards of propriety in its employment practices if it is to show leadership in the fight against tax avoidance. | She said: "The public sector must maintain the highest standards of propriety in its employment practices if it is to show leadership in the fight against tax avoidance. |
| "It must avoid the practice of using off-payroll arrangements for staff - which generates suspicions of complicity in tax avoidance and which fails to meet the standards expected of public officials. | "It must avoid the practice of using off-payroll arrangements for staff - which generates suspicions of complicity in tax avoidance and which fails to meet the standards expected of public officials. |
| "Those whose income is derived from monies raised through taxation have a particular obligation to make sure that they do not use tax avoidance schemes." | "Those whose income is derived from monies raised through taxation have a particular obligation to make sure that they do not use tax avoidance schemes." |
| John Whiting, director of tax policy at the Chartered Institute of Taxation, said some workers might make their own tax arrangements for perfectly legitimate reasons. | |
| "If you are just an ordinary freelancer, which is very prevalent these days - anyone from a plumber to journalist - working here and there, working through a company, then it is a perfectly sensible way of organising your affairs," he told BBC Radio 4's Today Programme. | |
| "What this report is targeting are people who are in what is often termed as 'disguised employment' - they're really an employee but they are putting the aura them of 'No, I'm operating for a company'." | |
| This, he said, was the charge being made against some BBC staff and some public sector workers. | |
| Mr Whiting said the taxman did have a "notorious" anti-avoidance provision to deal with this, named IR35, which has been operating since 2000, however the report pointed out that this provision was "not that easy to apply" and it was not being applied in as many situations as it could be. | |
| "Therefore, people have been getting away with it," he said. | |
| Enforcing the rules | Enforcing the rules |
| The committee said it still lacked full information about the number of people employed by the National Health Service or in local government who were paid through private companies. | The committee said it still lacked full information about the number of people employed by the National Health Service or in local government who were paid through private companies. |
| Members acknowledged that ultimately, whether or not staff with off payroll contracts were paying the right amount of tax was dependent on HM Revenue and Customs properly enforcing the rules. | Members acknowledged that ultimately, whether or not staff with off payroll contracts were paying the right amount of tax was dependent on HM Revenue and Customs properly enforcing the rules. |
| But they also expressed concern that in recent years, HMRC had reduced its enforcement of legislation designed to eliminate tax avoidance through the use of intermediaries. | But they also expressed concern that in recent years, HMRC had reduced its enforcement of legislation designed to eliminate tax avoidance through the use of intermediaries. |
| The BBC insisted that the actual number of people who were not paying tax at source was far smaller than the figures suggested. | The BBC insisted that the actual number of people who were not paying tax at source was far smaller than the figures suggested. |
| In a statement, the broadcaster said: "In many cases an individual - such as an occasional contributor to programmes - could be issued with a contract each time he or she is booked to appear. | In a statement, the broadcaster said: "In many cases an individual - such as an occasional contributor to programmes - could be issued with a contract each time he or she is booked to appear. |
| "We note the conclusions of the PAC report and will respond to the points raised as part of our detailed review of tax arrangements." | "We note the conclusions of the PAC report and will respond to the points raised as part of our detailed review of tax arrangements." |