An influential Whitehall committee has warned that the BBC faces “reputational risks” over the tax affairs of its MediaCity landlord the Peel Group.
The Commons Public Accounts Committee published a report this week urging the BBC to “make clear its expectation that, as an organisation funded by the licence fee, it expects companies with which it contracts to pay their fair share of tax”.
The report cites research from ExUrbe which suggested that the most profitable parts of the Peel Group pay no UK corporation tax.
At an evidence-gathering session with senior BBC directors in June, PAC chair Margaret Hodge said the Peel companies “do not pay their fair share of corporation tax”, adding that “at maximum it pays 10% corporation tax”.
However, Peel strongly denied the claims and in a statement said: “It is inaccurate to suggest that Peel is not paying its fair share of corporation tax. All Peel Group operating businesses, including Peel Media [the developer and owner of MediaCityUK], are UK-domiciled for taxation purposes and pay the appropriate level of UK corporation tax.”
The BBC occupies MediaCity on a 20-year lease, with a 10-year contract for studio facilities, at an annual operating cost of £18m, or £360m over the term of the contract.
The PAC also expressed ?concern that the broadcaster was becoming “overly dependent” on Peel, which holds a “monopoly on capital investment within the area” that may have prevented the BBC achieving best value for money.
It went on to demand that the BBC prove it had “assessed the potential risks of the Peel Group having a dominant position at its Salford site, and taken appropriate steps to address them”.
The report raised other concerns, such as staff relocation costs. The BBC has two months to respond to all points raised by the committee’s report.
chris.berkin@estatesgazette.com
