MPs to quiz Patel on presenter pay arrangements

Zarin Patel Zarin Patel: tax avoidance claims are 'offensive'

Zarin Patel will appear before the Public Accounts Committee on Monday afternoon to discuss the pay arrangements of some of the BBC's highest paid freelancers.

The chief financial officer will be joined by David Smith, head of employment tax, to answer MPs' questions about the legal practice of employing freelance staff on service company contracts.

Former Labour minister Margaret Hodge, who is leading the committee's inquiry into 'off-payroll' payments across the public sector, is particularly keen to examine the BBC's employment of some of its regular presenters on this basis.

Writing on the BBC blog this week, Zarin Patel said that service contracts were the BBC's 'preferred option' for paying its talent 'once a certain amount of work is being offered' to them as they were practical and offered the talent suitable flexibility.

'There are around 500 individuals with long term contracts paid in this way at the present time,' she said. 'It would be both unjustified and totally impractical to put all of these people on the payroll. By using the service company framework, which is set down by the HMRC, the BBC and other broadcasters can quickly and effectively contract people without having to undertake a lengthy detailed review of all their other work.'

Correct tax

She stressed that the BBC did not force people to set up service contracts to avoid them becoming full-time employees of the corporation.

And she denied that it was a tax avoidance measure. 'Once a service company is created, the individual has to pay the correct tax and National Insurance,' said Patel, adding that the BBC provided the HMRC with annual reports of all payments made to individuals who operate service companies.

'Suggestions, therefore, that we are somehow facilitating tax avoidance are not only wrong, they are offensive both to the BBC and to the hard-working people who make and present our programmes.'

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