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BBC - Tax Avoidance?

 
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R2Icon



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PostPosted: Fri Oct 05, 2012 7:41 am    Post subject: BBC - Tax Avoidance? Reply with quote

http://www.theweek.co.uk/business/49398/bbc-contracts-raise-suspicions-complicity-tax-avoidance


It's all going to stop. The BBC say, " it's quite normal" Lots of things that are no longer acceptable used to be "quite normal". Get with the programme, there is no hiding place for the tax dodgers now. Name, shame, and go back seven years for the tax due.
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ColinB
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PostPosted: Fri Oct 05, 2012 8:02 am    Post subject: Reply with quote

Neither the BBC nor other public services can have it both ways. The reason why there's so many people working for the Beeb whose tax isn't deducted at source is simply because the corporation has laid off so many salaried people and then employed them on a freelance contract basis. The reason? They don't have to bear all the costs of PAYE employment and can dispose of people's services when they choose.

If a contractor is self-employed as a sole trader then there's a valid argument that if the "employer" is their only source of income their tax should be deducted at source (as per HMRC rules) but if the service provider is selling those services to the BBC or other organisation through a Limited Company then the employer simply cannot make deductions at source. It's called "business". That's how it's done out there in the real world like it or not.

The problem, here, is that ever since Thatcher was in power there's been an encouragement for people to be more entrepreneurial and "go it alone". Self-employment - or the setting up of a Limited Company - brings with it self-control and independence, but it also entails personal risk. An employee paying PAYE does not bear the same risk as a self-employed person - and is much easier to pay off. That's why the BBC and others have drastically reduced employee head-count over the years; it shifts the risk from them to the employee or contractor.

I've been self-employed (with one or two stints on fixed-term PAYE contracts) since 1984 and in many ways I've paid the price of that. I've operated through my own Limited Company since 2002. Nobody has the right to deduct tax or NI from my billed fees at source. Absolutely nobody. My deductions are made by my Limited Company and declared to HMRC at the appropriate time. That's what I pay an accountant to do.

If this select committee really wants to increase the tax take from freelance contractors or business contractors then it must invite them to go back onto the PAYE books. If it isn't prepared to do that then everybody should just put up and shut up.

Like I mentioned earlier, you can't have it both ways.
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R2Icon



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PostPosted: Fri Oct 05, 2012 8:41 am    Post subject: Reply with quote

There is a difference Colin between being “self employed” and setting up a Ltd Company to employ yourself though. A big difference, especially when it comes to how much tax you pay.

There is also the Government’s small business ethics policy to look at too. That’s the one that says no publicly funded organisation should place an order on a small company, where the value of the order (or ongoing orders) is greater than 20% of the small company’s annual turnover.

People whom set up a one-person company for the sole purpose of providing “services” to one organisation is already against the policy introduced to protect small businesses from going bust, if suddenly the public organisation decides it no longer wants their service.

They can also look at IR35, and investigate all the BBC contracts against that too. Of course if they are genuine small companies with lots of customers, they have nothing to worry about, do they?

So yes they can have it both ways.

It’s simply not acceptable to have people like Paxman ( not necessarily him cos I don’t know) hounding MPs and others about Government Tax and spending etc when all the time they’re not paying their fair share into the system they’re being paid by, to criticise.
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RockitRon



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PostPosted: Fri Oct 05, 2012 9:12 am    Post subject: Reply with quote

I think we're talking about changing the habit of a lifetime.
It has been normal - high earners, particularly but not exclusively, in the entertainment industry, have been encouraged to be paid through limited companies since the 1960s, when corporation tax replaced income tax.
It's tax avoidance, not tax evasion. I bet Tony Blair and other retired politicians get paid for their services through a limited company.

The dual standard - Paxo and other high profile journalists hounding people about how much tax they pay, or not - is galling, and they have been allowed to get away with that for far too long.

Of course the question of tax avoidance shouldn't be limited to individuals. Large companies are dab hands at avoiding paying tax, and government should be looking at closing all those schemes and loopholes as well.
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ColinB
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PostPosted: Fri Oct 05, 2012 9:33 am    Post subject: Reply with quote

R2Icon wrote:
There is a difference Colin between being “self employed” and setting up a Ltd Company to employ yourself though. A big difference, especially when it comes to how much tax you pay.


Yes and no - it depends on the circumstances surrounding one's contractual commitment/s. When I created my Limited Company back in 2002 with two directors - myself and my wife - the only real difference for me was the fact that I was suddenly billing under a different name. In fact, I was also working as a Projects Manager at a major university on a fixed-term contract, but their HR and Finance Depts insisted on my being deducted PAYE at source - something that bothered my accountant at the time but all it entailed was that HMRC had to make adjustments at the end of the financial year, so it was they who were inconvenienced!

Basically, the amount of tax I pay at the end of the year hasn't differed much; I draw money from the business when there's enough in the pot and I don't when there isn't. Any personal income is still taxable and whichever way it's done I claim all allowable expenses.

R2Icon wrote:
There is also the Government’s small business ethics policy to look at too. That’s the one that says no publicly funded organisation should place an order on a small company, where the value of the order (or ongoing orders) is greater than 20% of the small company’s annual turnover.

People whom set up a one-person company for the sole purpose of providing “services” to one organisation is already against the policy introduced to protect small businesses from going bust, if suddenly the public organisation decides it no longer wants their service.

They can also look at IR35, and investigate all the BBC contracts against that too. Of course if they are genuine small companies with lots of customers, they have nothing to worry about, do they?


No - but that points back to my point in which I said that the easy way out is to restore people's employed PAYE status rather than put them on fixed-term, often short, contracts. But the BBC and others have long desired to reduced their PAYE head-count in order to avoid coughing up for all the employee benefits and compensation packages that would otherwise be effective. As I mentioned before, it goes right back to Thatcher's days when she and her government wanted us to be more "entrepreneurial" so I re-iterate that they simply cannot have it both ways.

R2Icon wrote:
It’s simply not acceptable to have people like Paxman ( not necessarily him cos I don’t know) hounding MPs and others about Government Tax and spending etc when all the time they’re not paying their fair share into the system they’re being paid by, to criticise.


It's not just people working on technical grades at the Beeb but many journalists and presenters who are forced to work on fixed-term (often short-term) contracts with no long-term security, so who's to blame? If I were those people I'd be doing exactly the same.
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R2Icon



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PostPosted: Fri Oct 05, 2012 9:34 am    Post subject: Reply with quote

RockitRon wrote:
I think we're talking about changing the habit of a lifetime.
It has been normal - high earners, particularly but not exclusively, in the entertainment industry, have been encouraged to be paid through limited companies since the 1960s, when corporation tax replaced income tax.
It's tax avoidance, not tax evasion. I bet Tony Blair and other retired politicians get paid for their services through a limited company.

The dual standard - Paxo and other high profile journalists hounding people about how much tax they pay, or not - is galling, and they have been allowed to get away with that for far too long.

Of course the question of tax avoidance shouldn't be limited to individuals. Large companies are dab hands at avoiding paying tax, and government should be looking at closing all those schemes and loopholes as well.


Pretty much Ron, tax evasion is illegal, tax avoidance is, arguably – just good personal financial management and not illegal in any way, so why not? And the big earners will still probably pay much more tax than the rest of us individually, in absolute terms, it’s only when you look at their “effective tax rate” that eyebrows become raised.

The BBC though, should be squeaky clean, they are the nation’s moral compass, if they fail to remain aloof from the day to day grubbiness of greed, then they can no longer stand in judgement on it. The BBC’s moral authority to question anything or anyone on Tax Avoidance has been eroded into oblivion. They no longer have it.
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R2Icon



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PostPosted: Fri Oct 05, 2012 9:43 am    Post subject: Reply with quote

ColinB wrote:
Thatcher's days when she and her government wanted us to be more "entrepreneurial" so I re-iterate that they simply cannot have it both ways.


Colin, it's not being entrepreneurial to set up a one person company, for you to do the same job you were doing before but pay less tax. ( I don't mean you personally) The 20% rule is there stop that from happening. Being entrepreneurial is "creating business" and growing it, not just using a company to avoid tax.
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PostPosted: Fri Oct 05, 2012 9:54 am    Post subject: Reply with quote

R2Icon wrote:


Colin, it's not being entrepreneurial to set up a one person company, for you to do the same job you were doing before but pay less tax. ( I don't mean you personally) The 20% rule is there stop that from happening. Being entrepreneurial is "creating business" and growing it, not just using a company to avoid tax.


No, but I'm referring to the messages that I clearly remember receiving on a near-daily basis from Thatcher and co. at the time (early 1980s) in which we were encouraged to "go it alone" and set ourselves up in business. That's what I mean by "entreprenuerial" - coming out from under the protective umbrella of PAYE employment. I still maintain that the option for those in power is simple - restore contracted service suppliers to employed status, even if that means increasing head-count. They don't want to do that. So...... they can't have it both ways.

Anyway, this is all a government smokescreen designed to (a) appeal to the blue-rinse Daily Mail brigade and (b) distract us from the bigger picture; they allegedly let Vodafone off the hook to the tune of £4.5 billion in unpaid Corporation Tax while drawing fire on public servants and BBC employees instead. Easy targets?
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R2Icon



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PostPosted: Fri Oct 05, 2012 11:53 am    Post subject: Reply with quote

I say again, Colin, Thatcher’s message wasn’t intended for people to “set up on their own” as you put it, in order to do exactly the same job as they were doing before but pay less tax in doing so. Setting up as an entrepreneur is about starting and “growing” a business, employing “other people”, making your business “grow” and generally helping the economy to “grow”. You seem to have formed the view that setting up on your “own”, is exactly that. It isn’t.
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PostPosted: Fri Oct 05, 2012 12:27 pm    Post subject: Reply with quote

R2Icon wrote:
I say again, Colin, Thatcher’s message wasn’t intended for people to “set up on their own” as you put it, in order to do exactly the same job as they were doing before but pay less tax in doing so.


I'm not exactly convinced by that on account of the fact that she was responsible for the development of a culture of greed from the very top down and an infectious "stuff you" attitude that was prevalent at the time. There isn't much of a gulf between that and the way people chose to operate their income tax affairs, given that this shift occurred at about the same time (reference IR "Schedule D" working etc).

R2Icon wrote:
You seem to have formed the view that setting up on your “own”, is exactly that. It isn’t.


I'm neither saying that nor implying that. After being "on my own" since 1984 I do have a fair idea what's what, Rachel.

What I'm simply saying is that if a public-sector organisation chooses to reduce its PAYE head-count by putting its employees on billable contracts then it has to accept that the arrangements by which those contractors will be engaged will be less clear-cut - with the simple alternative that they do away with contractors completely and insist that all apparently solo suppliers are brought back onto the payroll.

I'll say it again - they can't have it both ways. One or the other. Simple.
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ruddlescat



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PostPosted: Fri Oct 05, 2012 8:08 pm    Post subject: Reply with quote

I don't see how anyone can honestly say that Maggie was responsible for encouraging a culture of greed

What she encouraged at all levels of society was for people to better themselves financially not least by allowing ordinary council tenants to actually own an asset they had been paying rent on for years - there was nothing wrong with that though it was wrong that the houses sold were not replaced with new social housing Sad - and by allowing ordinary people to become shareowners for the first time

The problem was that certain greedy people did what came naturally to them and the press coverage didn't help with the glorification of Yuppie culture but that's down to human nature and actually was a much bigger problem in the Blair years than ever it was under Maggie

And before anybody starts banging on about the struggle of British industry in the Thatcher years that was largely caused by our membership of the EU which Maggie tried to fight but in trying to do so sadly had little support from her Cabinet - many parts of British industry became uneconomic because of these European and world factors and the same is still true today - it's very convenient for some people to place all the blame on Maggie but the real culprits were people like Ted Heath and Harold Wilson who got us involved in this whole silly European agenda which has cost us billions with very little benefit to this country Mad
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PostPosted: Fri Oct 05, 2012 8:37 pm    Post subject: Reply with quote

ruddlescat wrote:
I don't see how anyone can honestly say that Maggie was responsible for encouraging a culture of greed


You have to be joking. Seriously!

Rolling Eyes
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ruddlescat



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PostPosted: Fri Oct 05, 2012 8:43 pm    Post subject: Reply with quote

ColinB wrote:
ruddlescat wrote:
I don't see how anyone can honestly say that Maggie was responsible for encouraging a culture of greed


You have to be joking. Seriously!

Rolling Eyes


I don't joke about such matters Colin - nor do I jump on bandwagons simply because it's fashionable to do so Smile
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PostPosted: Fri Oct 05, 2012 9:41 pm    Post subject: Reply with quote

ruddlescat wrote:
I don't joke about such matters Colin - nor do I jump on bandwagons simply because it's fashionable to do so Smile


Nor do I.
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