RTE - VAT Leakage

[Gordon Gekko]

Please don’t get me started on RTE. I think it should be shutdown and retasked as purely a public service broadcaster funded only by the licence fee.

But I was listening to an Irish Independent podcast yesterday about RTE’s top earners and Fionnan Sheehan made a throwaway remark that the earnings for the contractors’ exclude VAT. Their status as contractors is a sham, which the dogs in the street know, but a point I’d never considered is the massive VAT cost and VAT leakage that their bogus status facilitates.

RTE is a broadcaster so it doesn’t charge VAT on the licence fee but it’s forced to incur an actual 23% cost on the bogus ‘fees’ of these people which it can’t recover. That’s more than twice as much as, say, the employer PRSI that would arise.

 

[ATC110]

When

Their status as contractors is a sham, which the dogs in the street know, but a point I’d never considered is the massive VAT cost and VAT leakage that their bogus status facilitates.

Do you mean their contractor status is just a method of them paying less tax when they should be PAYE?

I've often wondered if the motive for some of the presenters occasionally writing books or producing documentaries under their "production company" name is just to protect their contractor status ie they're not wholly dependent on RTE for their income therefore are within the Revenue rules and not bogusly self-employed.

 

[Gordon Gekko]

When

Do you mean their contractor status is just a method of them paying less tax when they should be PAYE?

I've often wondered if the motive for some of the presenters occasionally writing books or producing documentaries under their "production company" name is just to protect their contractor status ie they're not wholly dependent on RTE for their income therefore are within the Revenue rules and not bogusly self-employed.

Yes, basically.

But the 23% VAT charged is an additional and unnecessary cost for the taxpayer.

 

[Salvadore]

Yes, basically.

But the 23% VAT charged is an additional and unnecessary cost for the taxpayer.

But it ultimately returns to the exchequer. Admittedly, the collection process adds an otherwise unnecessary overhead.

 

[thedaddyman]

RTE is a broadcaster so it doesn’t charge VAT on the licence fee but it’s forced to incur an actual 23% cost on the bogus ‘fees’ of these people which it can’t recover. That’s more than twice as much as, say, the employer PRSI that would arise.

Bear in mind that if they were RTE employees, RTE would also be contributing to their pension. That + PRSI is likely to bring that addtional cost up tp around 18%. Throw in sick leave, maternity pay and all the things a contractor doesn't get but an employee does, and it's probably working out as cheaper.