In the news rather than reporting it, Jeremy Paxman is said to have fallen out with his BBC masters in a row over tax avoidance.
And, apparently, he’s not alone…
Some of the BBC’s biggest stars are hacked off at the way the BBC is reportedly hanging them out to dry by portraying them as tax dodgers.
Paxo wrote a letter to the Times telling them that “the BBC required me to form a company and to be paid through it if I wanted to continue as presenter on Newsnight. They claimed they had been told to do so by HMRC.”
HMRC strenuously deny any such direction. A spokesman said “HMRC does not advise employers on how they are to secure anyone’s services and employers should not suggest to those providing their services that HMRC requires them to use a personal service company as we most definitely would not.”
The BBC unsurprisingly refused to comment.
The last labour government put draconian efforts into penalising anyone who operated through a personal service company in order to minimise their taxes, so I have no doubt that there is no way that HMRC would have issued any such advise.
The use of these companies is advantageous to the employer as he avoids any obligations that he would have to an employee as the person concerned is not employed by them but by the company. This reduces their wages bill as they are not liable for employers NI payments.
Such companies have been the used for many years on the advise of accountants in order to minimise tax by spreading payments between husband and wife in order to avoid higher tax rates and by distributing the income as dividends which do not attract NI. These arrangements were a personal bug bear of Gordon Brown when he was Chancellor and he wasted millions trying to smash them into the dirt.
All he had to do was introduce legislation to make these arrangements unadvantageous, but then Gordon was never the most straightforward or brightest of individuals.
It is important to stress that these arrangements are perfectly legal and it is interesting to note that the Labour fervour for stamping them out does not seem to have been taken up by the current government.
I wonder why?…