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x5x3

Original Poster:

1,604 posts

133 months

[news] 
Friday 5th October 2012 quote quote all
This is back in the headlines with a lot of the BBC "stars" - claiming they were forced by the BBC to work this way - of course they are all fully entitled to pay the full amount to themselves as salary from their PSC and therefore the net tax/NI loss to the revenue is minimal (there would be some costs to running the PSC but not more than £1K or so pa).

What they are not saying of course is if they have or have they taken advantage of the opportunity to minimise their tax?

I wonder....

randlemarcus

9,331 posts

111 months

[news] 
Friday 5th October 2012 quote quote all
Personal opinion is that if they have the opportunity to minimise their tax burden, within the existing guidelines, then they should do so, and well done to those who have done so.

Blue62

1,747 posts

32 months

[news] 
Friday 5th October 2012 quote quote all
Provided they fall into line with IR35 (on the basis they're PS companies) then I can't see the problem, the BBC have been highlighted because they're high profile, but more and more professional people are working this way as there is more interim than permanent work around these days.

clockworks

824 posts

25 months

[news] 
Friday 5th October 2012 quote quote all
If the state coffers have lost out because of people working through an agency or personal services company, or just being self-employed, then it's the tax rules that are wrong, not the employer or the "employee".

eharding

6,827 posts

164 months

[news] 
Friday 5th October 2012 quote quote all
Blue62 said:
....the BBC have been highlighted because they're high profile.....
...and also were at the forefront of the moral outrage when this last hit the headlines.

I seem to recall Paxman looking like someone had put a cat turd on his coffee when Newsnight were covering the brouhaha about this last time, and a studio guest pointed out in passing that the practice was also rumoured to be widespread at the BBC. hehe

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FWDiane

5 posts

20 months

[news] 
Friday 5th October 2012 quote quote all
if all these contractors were to be classed as staff, who would be left with paying the employers NI bill? |The BBC, and so likely us. I don't fancy a 13.8% increase in the cost of my tv license frown

Serendipity72

191 posts

19 months

[news] 
Friday 5th October 2012 quote quote all
Shameful.
The BBC talk as though they occupy the moral high ground. Obviously they don't.

This is just like champagne socialism: "do what I say, not what I do".

Guam

19,437 posts

148 months

[news] 
Friday 5th October 2012 quote quote all
Yeah we did this one a few months back on here, its taken the MP's long enough to catch up with us smile

bennyboydurham

1,315 posts

54 months

[news] 
Friday 5th October 2012 quote quote all
I work in the media and this is normal practice. In return however for a pension, job security, holiday and sick pay and all the other employee benefits I can only dream of, I'd be quite willing to pay a bit more tax and NI!

Edited by bennyboydurham on Friday 5th October 14:55

x5x3

Original Poster:

1,604 posts

133 months

[news] 
Friday 5th October 2012 quote quote all
the point I was trying to make is that the "stars" seem to be quite happy to point the finger at the BBC for this and completely ignore the fact that they have (potentially) made a lot of money out of the situation - in other words I doubt they protested too much wink

Ozzie Osmond

15,640 posts

126 months

[news] 
Friday 5th October 2012 quote quote all
The real point here is very simple,

  • People at the bottom of our society avoid tax by working for cash etc.
  • People at the top of our society avoid tax by the use of service companies.
  • The mugs in the middle get nailed for full NI and PAYE.

Blue62

1,747 posts

32 months

[news] 
Friday 5th October 2012 quote quote all
Ozzie Osmond said:
The real point here is very simple,

  • People at the bottom of our society avoid tax by working for cash etc.
  • People at the top of our society avoid tax by the use of service companies.
  • The mugs in the middle get nailed for full NI and PAYE.
Good point Ozzie, but to some extent the market is pushing the people at the top in that direction, plenty of companies would rather hire interims for a host of reasons, to a large extent it's market driven.

tinman0

18,231 posts

120 months

[news] 
Friday 5th October 2012 quote quote all
Blue62 said:
Provided they fall into line with IR35 (on the basis they're PS companies) then I can't see the problem, the BBC have been highlighted because they're high profile
Because the BBC led the charge against of moral outrage that people could be avoiding paying tax in the first place! And then are discovered to also be leading the way to ensuring that they employ next to no one to save themselves a bundle in Employers NI!

Look up the word "hypocrite"!

Blue62

1,747 posts

32 months

[news] 
Friday 5th October 2012 quote quote all
tinman0 said:
Because the BBC led the charge against of moral outrage that people could be avoiding paying tax in the first place! And then are discovered to also be leading the way to ensuring that they employ next to no one to save themselves a bundle in Employers NI!

Look up the word "hypocrite"!
In the media sector this is common practice, not confined to the BBC at all. I take your point on the fact thsat they covered the story, but I think you'd be jumping up and down even more if they swept it under the carpet (as they appear to have done with Jimmy Savile). Interestingly (or not) the introduction of IR35 was prompted by the number of train drivers operating under PS companies following the privatisation of the railways.

sugerbear

874 posts

38 months

[news] 
Friday 5th October 2012 quote quote all
FWDiane said:
if all these contractors were to be classed as staff, who would be left with paying the employers NI bill? |The BBC, and so likely us. I don't fancy a 13.8% increase in the cost of my tv license frown
The other option migh be to pay them less but employed on a permanent basis.

martin84

5,366 posts

33 months

[news] 
Friday 5th October 2012 quote quote all
Serendipity72 said:
Shameful.
The BBC talk as though they occupy the moral high ground. Obviously they don't.

This is just like champagne socialism: "do what I say, not what I do".
Like when David Cameron described Jimmy Carr's tax avoidance as morally repugnant while Gary Barlow - who campaigned for Cameron in 2010 - was left unmentioned?

turbobloke

60,033 posts

140 months

[news] 
Friday 5th October 2012 quote quote all
martin84 said:
Serendipity72 said:
Shameful.
The BBC talk as though they occupy the moral high ground. Obviously they don't.

This is just like champagne socialism: "do what I say, not what I do".
Like when David Cameron described Jimmy Carr's tax avoidance as morally repugnant while Gary Barlow - who campaigned for Cameron in 2010 - was left unmentioned?
Yes - take that Mr Cameron.

RedLeicester

6,082 posts

125 months

[news] 
Friday 5th October 2012 quote quote all
Ozzie Osmond said:
The real point here is very simple,

  • People at the bottom of our society avoid tax by working for cash etc.
  • People at the top of our society avoid tax by the use of service companies.
  • The mugs in the middle get nailed for full NI and PAYE.
So a freelance cameraman who might work for the BBC, and a variety of other production houses over the course of a year and earn maybe £20k per annum is oh-so wicked for operating as a company? Oh the shame on them.

Same as whining about "super-rich" movie stars or pop acts, such sweeping statements are utter nonsense and do nothing more than deflect from the truth and inflame the hyperbole.


sugerbear

874 posts

38 months

[news] 
Friday 5th October 2012 quote quote all
RedLeicester said:
Ozzie Osmond said:
The real point here is very simple,

  • People at the bottom of our society avoid tax by working for cash etc.
  • People at the top of our society avoid tax by the use of service companies.
  • The mugs in the middle get nailed for full NI and PAYE.
So a freelance cameraman who might work for the BBC, and a variety of other production houses over the course of a year and earn maybe £20k per annum is oh-so wicked for operating as a company? Oh the shame on them.

Same as whining about "super-rich" movie stars or pop acts, such sweeping statements are utter nonsense and do nothing more than deflect from the truth and inflame the hyperbole.
Rubbish example if the freelancer can pick and choose their job and is only employed for short periods of time at each company.

A better example would be a senior manager who rather than being employed on a permanent basis sets up his own company and then is paid directly to the company. They can then avoid ni contributions by paying themselves a dividend, employ their wife as company secretary and use her tax allowance and offset expenses against their tax bill. They are essentially contracted to a single company for a long period of time on a rolling contract.

I don't know why certain sections of society think that it's perfectly acceptable to evade tax either through doing work cash in hand or muddying the waters between what is a self employed and permanent. Oh wait I do know. Greed.

x5x3

Original Poster:

1,604 posts

133 months

[news] 
Friday 5th October 2012 quote quote all
sugerbear said:
RedLeicester said:
Ozzie Osmond said:
The real point here is very simple,

  • People at the bottom of our society avoid tax by working for cash etc.
  • People at the top of our society avoid tax by the use of service companies.
  • The mugs in the middle get nailed for full NI and PAYE.
So a freelance cameraman who might work for the BBC, and a variety of other production houses over the course of a year and earn maybe £20k per annum is oh-so wicked for operating as a company? Oh the shame on them.

Same as whining about "super-rich" movie stars or pop acts, such sweeping statements are utter nonsense and do nothing more than deflect from the truth and inflame the hyperbole.
Rubbish example if the freelancer can pick and choose their job and is only employed for short periods of time at each company.

A better example would be a senior manager who rather than being employed on a permanent basis sets up his own company and then is paid directly to the company. They can then avoid ni contributions by paying themselves a dividend, employ their wife as company secretary and use her tax allowance and offset expenses against their tax bill. They are essentially contracted to a single company for a long period of time on a rolling contract.

I don't know why certain sections of society think that it's perfectly acceptable to evade tax either through doing work cash in hand or muddying the waters between what is a self employed and permanent. Oh wait I do know. Greed.
at the risk of getting back on topic - I deliberately used the word stars in my OP, the debate over usage of PSCs has been done before, what is different this time is that the stars are saying the BBC forced them to do it - but are not being clear if they have made full use of the tax benefits or "done the right thing" and maximised the tax they pay through the PSC.

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