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BBC changes stars' pay policy

Some of the BBC's biggest stars will see their pay arrangements change after controversy over potential tax avoidance.

More than 100 high earners, reported to include Jeremy Paxman and Fiona Bruce, who are currently employed on a freelance basis, will become staff.

It comes after a report by the Public Accounts Committee criticised the widespread use of payments to personal service companies (PSCs) by the BBC and others.

The report said using the companies, often for on-air talent, generated a suspicion of complicity in tax avoidance.

The BBC's review, carried out by accountancy firm Deloitte, found "no evidence of a BBC policy to engage with tax/NIC avoidance" but found a number of individuals in prominent positions in the corporation who were engaged with PSCs when they would be expected to be employees.

The BBC will set up an "objective employment test" for people who work for it and review the terms of their employment, but the report identified 804 freelance on-air talents who earn more than £50,000 as a priority.

The BBC estimated that 131 individuals will be offered staff contracts when their current arrangements expire.

BBC trustee Anthony Fry said the corporation would not allow exceptions to the new system.

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