The British Broadcasting Corporation (BBC) is in the news after the Income Tax Department of India surveyed the organisation’s office in Delhi earlier today.
The BBC survey was carried out at the company premises given the organisation’s deliberate non-compliance with the Transfer Pricing Rules and its vast diversion of profits. Transfer Pricing essentially ensures that the transaction between ‘related’ parties is at a price that would be comparable if the transaction was occurring between unrelated parties.
According to sources, there has been persistent non-compliance with the Transfer Pricing rules for years. The sources have informed that BBC has been served several notices by the IT department, however, they have persistently been non-compliant. They have also been allegedly diverting their profits.
The key focus of these surveys is to look into the manipulation of prices for unauthorised benefits, including tax advantages. These surveys have been undertaken due to BBC’s persistent non-compliance with the norms, making it a repeat offender.
Every UK household with a TV playing live programmes has to pay a ‘licensing fee’ to the BBC
Even as the Income Tax department is probing the BBC’s India office over alleged non-compliance, it is worth noting that the state-sponsored media of the United Kingdom is notorious for mulcting British citizens. The UK’s public broadcaster is financed by the television licensing fee, similar to a tax, and failure to pay can lead to imprisonment for committing a criminal offence.
A TV Licence is a legal requirement to install or use television receiving equipment for live viewing on any channel, TV, or streaming service, and to access BBC iPlayer, on any device. This is mandatory, regardless of the channels or the method of receiving them. It is important to note that the licence fee is not a fee for BBC services or any other television services, even though the revenue generated from the licence fee is utilized to finance the BBC.
Since 1991, the BBC has served as the relevant licensing authority, responsible for the collection and enforcement of the TV Licence fee. The BBC hires companies under the trademark ‘TV Licensing’ to carry out this responsibility. The BBC, along with its authorised contractors, must adhere to legal requirements when collecting and enforcing the license fee.
Households with a TV playing live programs must pay a set fee to the government, currently £159 for colour and £53 for black-and-white licenses, with discounts for the elderly and disabled. The money is deposited into a state fund, which is then distributed to beneficiaries, including the BBC, through parliament.
Usually, the annual license fee cost is adjusted each April to reflect inflation, except in 2010 when the fee remained fixed at £145.50 for six years.
According to the Communications Act 2003 and the Communications (Television Licensing) Regulations 2004 (amended), it is mandatory to obtain a TV Licence and pay the associated fee. Section 363 of the Communications Act 2003 specifies that watching live programming on any channel, TV, or streaming service, or using BBC iPlayer on any device, without a valid TV Licence is a criminal offence.
Section 365 of the Communications Act 2003 mandates that a person who holds a TV Licence must pay a fee to the BBC. The Communications (Television Licensing) Regulations 2004 (amended) detail the amount of the fee and the methods of payment, which can be either a lump sum or in instalments.
The BBC has relied primarily on the license fee for its income for many years. The organisation’s 2020-21 Annual Report reveals that the license fee provided £3.75 billion of its total £5.06 billion income, with the remainder from grants and commercial agreements.
However, in January 2022, the British government announced a two-year freeze on the British Broadcast Corporation (BBC) license fee, with plans to completely do away with the system by 2027. The decision by the UK’s Conservative government was taken as a cost-cutting measure to assist citizens grappling with the COVID-19 pandemic, high inflation rates, and increased living expenses.
The BBC also had proposed to increase its existing licensing fee from £159 to £180 but was turned down by the then-Boris Johnson government as it came under the firing line of the critics for record-high inflation and price surge.
Online campaign to defund the BBC underway
Consequently, a campaign is also underway in the United Kingdom to defund the BBC, adding that the ‘licensing fee’ extracted by the government in the name of the broadcaster is unclear and forced people to cough up the said amount even when they don’t subscribe to the organisation’s services.
“We will lobby the government to decriminalize the license fee as the BBC’s current system for detecting and prosecuting non-payment is discriminatory and unfairly impacts women and those with low incomes. This is due to intentional ambiguity surrounding the right to refuse entry, and it must be addressed to ensure a fair system for all,” the campaign for defunding the BBC says.
Forcing people to pay a license fee for non-BBC live TV under the threat of imprisonment is unreasonable, the campaign adds. It aims to bring about the necessary change to the BBC charter by lobbying representatives in Westminster and maintaining an ongoing media campaign.
