The Corporation began moving up to 100 of its stars onto staff contracts at the end of last year after MPs led criticism that it had been paying too many of them via “personal service companies”, which can be used as a legal way of reducing tax liabilities.
Those affected have been told that the starting points for negotiation are a 13 per cent pay cut if the presenters agree to become employees with only the statutory minimum conditions set down by law,
13% being, roughly, what the BBC will have to pay in employers’ national insurance contributions. We would therefore take this as proof of Ritchie’s contention that (correctly) most to all of the incidence of employers’ national insurance is upon the workers in the form of lower wages.
Which is fine: except that we now also need to point out that the starting rate of tax upon incomes is in the 40-45% level (income tax at 20%, employees’ NI at 11 or 12 %, employers’ at 13 to 14% on the gross sum) and top rate taxation of incomes is 55% or so (there being no employees’ NI at this level).
It’s therefore very difficult indeed to start claiming that the UK is a low tax country. And we’re also at or around that Laffer Curve peak that Diamond and Saez found in a tax system with allowances at that top rate.
In fact, just further proof that the UK has very high taxes indeed upon incomes……