Why is the BBC corporate structure is misleading to the public

Waiting for an internal review by British Broadcasting Corporation of their handling of this request.

Dear British Broadcasting Corporation,

I have to ask why the BBC insists on calling itself and ‘an institution’ rather than a ‘Corporation’. It matters as Corporations pay UK ‘Corporation tax’ and yet the BBC does not (and has not) paid a penny in UK and overseas earnings. As an ‘Institution’ it may have more merit as it is has been ‘institutionalised’ to such an extend that the last government requested (under the BBC’s last Charter review 2010) was concerned about the BBC’s lack of progress re: ‘diversity’. However the real problem is not multicultural but fifty years of ‘inbreeding’ that is linked historically to the BBC and the Civil-Service, with ‘grace-and-favor’ appointments. The BBC is NOT a 'corporation' as it pays no Corporation Tax at all. This has to change.

Another problem is that the BBC is not an institution either. It is a ‘group’ of BBC owned production companies. There are now eighteen (wholly owned BBC production companies in all), designed to distribute in a ‘tax efficient’ manner key presenters and BBC production staff paid above £150,000 a year and above that are now ‘off the record’ (to FOI requests).

This obviates the need to be more transparent as a Corporation, Institution or private limited company gains extra (non BBC Charter) privileges, private tax savings and salary privacy. The BBC pays less Corporation tax than all the UK water companies - combined - and as an institution declares itself to be ‘independently’ funded - which of course it is not! It is entirely dependent on a taxpayer subsidy of the TV license.

As a rough guide the BBC consumes £3.8 Billion pounds annually and delivers less than 1 Billion in ‘overseas earnings’ which is again not subject to UK corporation tax. The BBC controls (more than) eighteen other (UK based) Limited companies that are able to hide the production costs and salaries and pension schemes which top £1 million liabilities and are considered financially ‘toxic’ if more widely known. The TV license is in large part financing the generous management pension scheme.

The only way around this dependency and its lack of purpose is to require a BBC subscription to core functions. If it is as popular as the BBC claims then it will be able to compete with NetFlix, Sky and BT (a former public subsidy institution and the Post Office (a former public subsidy institution). So it can work.

The BBC can then pay tax on earning like everyone else does. The BBC should be earning over 20 Billion Dollars a year in revenue and the fact that it makes a huge 75% loss each year speaks for itself. The BBC cannot forever go on like this. As a country we need media competition and open markets within the entire industry. The BBC prohibits such incentive.

The BBC makes an annual loss, it is not a profitable corporation - (or Institution) - and its many ‘private’ limited companies are designed to ensure opacity (of where the money goes and how it is used). Not used entirely for BBC programming, but hidden BBC staff salaries that are far too obvious on the ‘BBC corporate’ structure can be defrayed or put into ‘private’ offshore accounts. Are they all REALLY worth it?

This is no way to run a broadcasting company.

I leave you with this extract from THE GUARDIAN (which the BBC often source headline stories ). Dated 24th November 2017. The Guardian.
‘The BBC is to publish detailed information about the complaints it receives from viewers after Ofcom, the media regulator, demanded that the corporation become more transparent.
Under new rules the BBC will have to reveal the number of complaints it receives every fortnight, identify the shows that received more than 100 complaints, and explain the editorial issues raised by the complaints and whether they were upheld.’

But I have no confidence that this will make any difference at all. After all DG Tony Hall did say the the BBC is a ‘vital’ to the nations as the NHS. The NHS is another grossly badly managed and (for managers overpaid) industry. Good in parts (at best) for those it serves.

I would like to see the BBC as non-quango, non institionalised and more commercially aware Corporate body (but that means you have to pay the UK 'Corporation Tax' on UK and overseas earnings. A private BBC subscription service may actually be popular (just pay your tax please). The future can be different than negativity.

Yours faithfully,

Philip Searle

FOI Enquiries, British Broadcasting Corporation

Dear Philip

Thank you for your request for information under the Freedom of Information Act 2000, as detailed in your email below. Your request was received on 01/12/2017.  We will deal with your request as promptly as possible, and at the latest within 20 working days. If you have any queries about your request, please contact us at the address below.

The reference number for your request is RFI20171786.

Kind regards,

Information Rights

BBC Freedom of Information
BC2 A4, Broadcast Centre
201 Wood Lane
London W12 7TP

www.bbc.co.uk/foi
Email: [BBC request email]

Tel: 020 8008 2882

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FOI Enquiries, British Broadcasting Corporation

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Dear Mr Searle

 

Freedom of Information Act 2000

Reference: RFI20171786

Thank you for your request made under the Freedom of Information Act
2000.  Our response is attached above.

Should you have any queries, please contact us via the details below
quoting the reference number above on all correspondence.

Yours sincerely        

                                 

                                 

Information Rights

                           

                           

Information Rights            

BBC Legal

BC2 A4, Broadcast Centre

201 Wood Lane

London W12 7TP

 

Website: [1]www.bbc.co.uk/foi

Email: [2][BBC request email]

Tel: 020 8008 2882

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Dear British Broadcasting Corporation,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of British Broadcasting Corporation's handling of my FOI request 'Why the BBC corporate structure is misleading to the public'.

I am concerned that the BBC pays no corporation tax on earnings. This is evidentally an abuse when the BBC claims back corporation tax to fund programmes that were designed to be from 'independent' production companies that do pay 'corporation tax'. This is also illegal under EU stipulations as well as complicating the process underwhich the BBC operates as a charter. The BBC is not entiled to claim and that is a fact.

So I would like a reply as to why the BBC claim to have access to tax refunds when they pay zero corporation tax. The BBC is 'incorporated' is it not? This is misleading if no corporation tax is paid (at all) and a refund is being claimed. We should be clear if the BBC is funding private limited companies to 'reclaim' tax the BBC does not pay. This is inequitable and totally dishonest to apply.

This information was widely reported in THE SUNDAY TIMES and can be referenced here:
'BBC shoots dramas through tax loophole' dated 31st December 2107 (page 3).

'excerpt' from the above article:
'Accounts filed by the BBC Grafton House Productions, a subsidiary, revealed that it claimed corporation tax credits worth £8.2m in the finacial year to March and £9.2m and £5.3m in the previous years'

I repeat that the BBC is not entiled to corporation tax credits and should refund the money in all honesty and admit that this was a mistake by the corporation.

A full history of my FOI request and all correspondence is available on the Internet at this address: https://www.whatdotheyknow.com/request/w...

Yours faithfully,

Philp Searle

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