Strictly in the money: Tess Daly winds up production company and walks away with a cool £2.2million after BBC closes tax loophole

  • She closed Sugarstep Productions, used to channel earnings from Scritcly 
  • It follows a crackdown on BBC paying staff through private companies 
  • A 2012 review 96 presenters were being paid through these businesses
  • This arrangements benefits both the stars and the Beeb in taxes 

By Richard Eden and Tim Lamden For The Daily Mail

Published: 18:34 EST, 20 November 2016 | Updated: 21:06 EST, 20 November 2016

Tess Daly will be waltzing to the bank – to collect a cool £2.2million after closing her business

Strictly Come Dancing presenter Tess Daly will be waltzing to the bank – to collect a cool £2.2million after closing her business.

The 45-year-old received the small fortune after shutting down Sugarstep Productions, which she used to channel earnings from Strictly.

It follows a crackdown by the Government on the BBC paying key staff through personal service companies.

Miss Daly, who also hosted the National Lottery show and does lucrative modelling work, could be among 109 famous names forced to reveal annual pay from the Corporation.

The broadcaster had brought 85 presenters on to the books as permanent members of staff – and all those earning more than £150,000 per year are affected. She founded Sugarstep in 2009 and a statement of solvency shows it had £2.185million in the bank and debts owed to her of £10,000.

Under tax laws, Miss Daly could be liable to pay 28 per cent capital gains tax on virtually the whole amount, having initially deposited just £1,000 into the firm when it was established.

She could apply for Entrepreneurs’ Relief, resulting in a bill of just 10 per cent capital gains tax. Successful applicants can claim up to £10million of relief during their lifetime. Chris Sanger, global head of tax policy at Ernst and Young, said the relief was ‘designed to reward enterprise’.

Explaining the tax benefits of earning through a personal service company, Mr Sanger added: ‘There will be corporation tax at 20 per cent on earnings within the company and then there will be capital gains tax when it comes to liquidation.

‘But ultimately the amount that a person is taxed through a personal service company will be less than if they were a direct employee. The personal service company doesn’t have to pay national insurance and neither does the employer so they can pass on the saving to the company.’

The BBC began moving 85 of its stars on to staff contracts in 2013 following an outcry over the use of public service companies to reduce tax liabilities.

It followed a 2012 review by accountancy firm Deloitte which identified that 96 on-air ‘talent’ workers were paid more than £50,000 a year through service companies in 2011-12. The report described them as a ‘high priority’ for becoming members of staff.

Household names in the category reportedly included newsreaders Fiona Bruce, Emily Maitlis, Gavin Esler, Joanna Gosling and Tim Willcox.

Public service companies were introduced at the turn of the century by Gordon Brown when he was Chancellor to help self-employed workers, including plumbers and labourers, who struggled to get work unless they formed a limited company.

But they have been exploited by thousands. Being paid through a service company can allow high earners to pay 20 per cent corporation tax on some income instead of the 45 per cent top rate of income tax. This is because they can take their salary as dividend payments. They also avoid paying 12 per cent National Insurance.

Although Miss Daly is closing her own company, she has joined forces with her husband, Vernon Kay, becoming a director and shareholder of his business, 21 TV Ltd, earlier this year

Public service companies were introduced at the turn of the century by Gordon Brown when he was Chancellor to help self-employed workers

But the employer also benefits as they do not have to pay a 13 per cent National Insurance contribution.

Although Miss Daly is closing her own company, she has joined forces with her husband, Vernon Kay, becoming a director and shareholder of his business, 21 TV Ltd, earlier this year.

The couple joined up just as Kay was embroiled in controversy over links to lingerie model Rhian Sugden. A spokesman for Miss Daly declined to comment last night.

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