City Hall Under Fire Over BBC Stamp Duty Agreement

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City Hall has been criticised for agreeing to underwrite half of the stamp duty that could be imposed on the BBC as the broadcaster plans to open new studios in the £1.1 billion Olympic Park development.

Last summer, BBC announced that it would build a brand new set of studios that will be located at the east London site by 2022/23, in concert with the London Legacy Development Corporation (LLDC). The LLDC is a body that is accountable to the mayor of London and is tasked with the development of the new business and residential hub of the Queen Elizabeth Olympic Park.

However, the HM Revenue & Customs (HMRC)is yet to make a decision whether it will impose stamp duty on the new studios. In order to secure the move of the BBC to the area, Sadiq Khan, the mayor of London, granted the LLDC permission to underwrite a “a maximum of 50 percent” of the stamp duty of the BBC “should it become due.”

The stamp duty agreement comes on top of an £11 million grant that will be granted that the Greater London Authority will supply to the LLDC towards the capital costs of the BBC building.

The chief executive of the TaxPayers’ Alliance, John O’Connell, said that the agreement signified “one rule for them and another for the rest of us.”

He added: “If ordinary taxpayers and businesses across the country are paying huge amounts of stamp duty, then why can’t the BBC suffer from it like the rest of us? Any money Sadiq gives to the BBC is taxpayers money, which could be going towards local police budgets instead.”

Caroline Pidgeon, the Chair of the London Assembly’s transport committee, stated: “We should be able to attract firms and organisations from around the world to locate to this wonderful location, without huge taxpayer subsidies being necessary. To be offering such huge subsidies to the publicly funded BBC shows that the Olympic Park is not reaching its full potential.”

However, Gareth Bacon, the leader of the Conservatives in the London Assembly, defended the decision.

He stated: “I think the BBC gets enough taxpayers money and take a dim view of them getting any more.”

He continued: “However, the presence of the BBC is critical to the regeneration of a major phase of the Queen Elizabeth Olympic Park. The government have effectively demanded it and their funding offer is contingent on it, so without securing the BBC the whole project could be at risk. In that light, the offset to underwrite half of the cost becomes more defensible.”

A spokesperson for the office of the mayor stated: “East Bank is the most ambitious project of its kind for decades, placing culture and education at the heart of the Olympic legacy. It will create 2,500 jobs, deliver £1.5bn of economic benefit and 600 new homes.”

He added: “Professional tax advisors have advised the mayor that stamp duty will not be payable on this building. A fair arrangement has been negotiated with the BBC, in case this proves not to be the case, so that this scheme can progress on schedule.”

A spokesperson for the BBC stated: “We have nothing further to add.”