Media: BBC ‘admits’ tax evasion in India, ‘intends’ to pay Rs 40 crore
Virendra Pandit
New Delhi: Six months after it celebrated its centenary, the British Broadcasting Corporation (BBC) has reportedly admitted tax evasion in India and ‘intends’ to pay Rs. 40 crores to the Income Tax Department, the media reported on Tuesday.
The BBC, an unofficial mouthpiece of British foreign policy, which claims to be the purveyor of democracy, freedom of expression, probity, honesty, and other similar stuff worldwide—not at home, though—has agreed to cough up Rs 40 crores to make up for their tax evasion over a period of almost 6 years – from 2016 to 2022, the reports, quoting officials, said.
According to the media reports, the broadcaster, which sermonizes all others, is yet to file revised returns or provide their commitment to the Tax Authorities in writing. The reports said the BBC has only made a statement of intent so far and no payment has been received by the IT department.
Following reports of tax evasion, the BBC offices were ‘surveyed’ by tax authorities for 3 days in February 2023. Then, the Finance Ministry explained the depth of the alleged tax fraud committed by the BBC.
Without naming it, the official statement said that a survey action under section 133A of the Income Tax Act, 1961(the Act) was carried out at the business premises of group entities of a prominent international Media Company in New Delhi and Mumbai.
It noted the BBC is engaged in the business of development of content in English, Hindi, and various other Indian languages, advertisement sales, and market support services, etc in India. The income/profits shown by various group entities under BBC India do not match their scale of operations in India, as the quantity of content in India is substantial.
During the ‘surveys’, the Income Tax department unearthed evidence that showed unpaid taxes on certain remittances which remained undisclosed as income in India by the foreign entities of the group.
The ministry informed the survey revealed that BBC India had made remittances to its foreign offices for utilizing the services of seconded employees, or temporary employees sent from overseas. While such remittances are subjected to withholding tax, BBC avoided it.
While the anti-Modi groups, also known as the ‘liberal’ ecosystem, tried to defend the BBC and blamed the NDA government for conducting the survey at the BBC premises, the broadcasting company has a history of tax evasion in Britain itself.
For example, a 2012 report from the Public Accounts Committee in the United Kingdom underlined that many BBC employees were not paying their taxes at the source. The BBC admitted that 148 of its 467 presenters were employed through personal service companies, despite them often being employed long-term. Their contracts shared characteristics with typical pay-as-you-earn (PAYE) contracts.
In the late 1990s, the BBC started hiring presenters through ‘personal service businesses.’ A personal service company is a business created specifically to handle an employee’s affairs. The BBC entered into a contract with their firm rather than the individual employee. In other words, many of the independent ‘service providers’ or the ‘self-employed’ would actually be the BBC staff.
The BBC would profit since the employee would be in charge of their tax affairs and the company would no longer be required to run PAYE or make employers’ national insurance payments. By paying themselves a modest salary through their company and getting the remainder of their income in dividends, the presenter might reduce their tax obligations. There was a hefty tax advantage from this.
In 2016, the HM Revenue and Customs started an investigation into more than 100 BBC broadcasters amid allegations that they had underpaid their income tax and National Insurance contributions. An investigation of “a very significant number of BBC news presenters” had been started by the officials.
