The Great Disconnect: Why the UK is Legally Unplugging from the BBC Tax

The British public is undergoing a quiet revolution. What was once seen as a national duty—paying the BBC licence fee—is increasingly viewed through a lens of legal skepticism and fiscal resentment. As Jacob Rees-Mogg highlights, the current political climate has fractured the social contract, leading to a surge in citizens seeking legal ways to discontinue the tax [00:18].

The Fracture: Sentiment and Fairness

The primary driver of the current "opt-out" movement is a perception of systemic unfairness. Viewers are particularly incensed by proposals to grant free licenses to those on benefits while middle-income earners and pensioners are left to shoulder the cost [00:27]. This has shifted the sentiment from supporting a public service to resisting what many call a "straight bribe" to core voters [01:19].

The Legal Exit Strategy: How and When to Discontinue

The best time to discontinue the license is when your viewing habits no longer include live broadcasts or the BBC iPlayer. The law is clear: you do not need a license for DVDs, on-demand streaming (Netflix, Disney+), or catch-up services from other broadcasters [03:15, 04:35].

Many in the community argue that the "when" is now, as digital alternatives have rendered the BBC’s monopoly over "essential" viewing obsolete. By shifting to YouTube or delayed "time-shifted" viewing, citizens can legally bypass the fee while still accessing high-quality information [06:52].

Market Forces: Sink or Swim

The consensus among commenters is that the BBC must be exposed to the "cold shower" of market forces. If the BBC is as valued as it claims, it should survive on a voluntary subscription basis. Forcing workers to subsidize a service they do not use is increasingly untenable. By legally opting out, the public is forcing a market correction: the BBC will either evolve into a competitive, high-quality service or sink under the weight of its own obsolescence [09:58].

How to avoid paying the TV Licence fee legally

Jacob Rees-Mogg · 377k views

Phoenixing Fraud: How UK Taxpayers Lose Billions

 

Phoenixing Fraud: How UK Taxpayers Lose Billions

The UK's tax authority, HMRC (His Majesty's Revenue and Customs), has recently revealed a staggering loss of £836 million due to a specific type of tax evasion known as "phoenixing." This figure is a massive 45% higher than previous estimates, showing just how widespread and damaging this issue is. Phoenixing is a sneaky tactic where companies repeatedly shut down and then quickly restart under a new name, often to avoid paying taxes they owe, particularly VAT (Value Added Tax) and other business debts. It's especially common among smaller businesses.

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How Phoenixing Works 

Imagine a company that owes a lot of money in taxes, perhaps from sales or employee contributions. Instead of paying these debts, the owners decide to close down the company, liquidating it (meaning, selling off its assets). But before all the debts are settled, or sometimes even before the liquidation is complete, the same people who ran the old company start a brand new company, often with a very similar name or operating from the same location, and doing the same kind of business. It's like a mythical phoenix bird that burns itself to ashes only to rise again, but in this case, it's about dodging tax bills.

Here's a step-by-step breakdown:

1. Old Company Accrues Debt: A business operates, generates income, and incurs tax liabilities (e.g., VAT, corporation tax, PAYE).

2. Strategic Liquidation/Dissolution: Instead of paying these debts, the directors decide to put the company into liquidation or simply dissolve it. This usually happens when the tax bill becomes too large to manage.

3. Assets Transferred (Often Illegally): Crucial assets or the "goodwill" (customer base, brand reputation) of the old company might be secretly transferred to a new, secretly created company, often at a low or no cost.

4. New Company Rises: The same individuals (or close associates) quickly set up a new company. This new company then takes over the old company's business activities, customers, and even employees, but it has none of the old company's debts.

5. Unpaid Debts are Written Off: The old company, having no assets left or being officially liquidated, leaves its tax debts unpaid, and HMRC (and other creditors) lose out.

6. Cycle Repeats: This process can be repeated multiple times, allowing the same individuals to operate businesses while systematically avoiding tax payments.

The Impact and Government Response

The latest figures for the 2022-23 tax year show that these losses from phoenixing made up more than a fifthof the total £3.8 billion in tax losses, significantly more than the previously estimated 15%. This highlights a serious drain on public funds that could otherwise be used for essential services.

The UK government has acknowledged this problem and has promised to crack down on phoenixing. Their strategy includes:

• Increased Upfront Payment Requirements: Making businesses pay more tax earlier to reduce the amount they can accrue and then evade.

• Expanded Enforcement Sanctions: Tougher penalties for those caught engaging in phoenixing activities.

• Greater Director Accountability: Holding company directors more personally responsible for company tax debts, making it harder for them to walk away from liabilities by simply closing one company and starting another.

These measures aim to make phoenixing less attractive and more risky for those attempting to exploit the system.