/ Money, Technology

Why the government’s sitting on £1bn of TV licence fees

If you’re one of the millions who pay for their TV licence by direct debit or cash payment plan, did you know you’re giving a £1bn interest-free loan to the government?

When I moved house last year, I took out a new TV licence. Moving is an expensive business, so I thought I’d spread the cost of the licence by paying by direct debit.

What I didn’t realise until then was that anyone who pays for their TV licence by monthly direct debit is charged double for the first six months. You then have to make the regular payment from month seven. This effectively means that your TV licence account is six months in credit all the time.

You don’t get this money back until you no longer have to pay for a TV licence or you switch payment method by paying your licence fee in advance. So yes, for many of us that means holding out until we turn 75 or die. Great.

£1bn of TV licence cash overpaid

I initially told myself to get over it. It’s £72.75 that I’ll get back at some point. But the thought kept festering. Why on earth should they keep my money like this? So I decided to issue a request under the Freedom of Information Act, and that’s when I discovered the sheer scale of this interest-free loan.

14.7 million households pay for their TV licence by direct debit, with a further 1.5 million paying under a ‘cash payment plan’ or ‘monthly cash plan’, whereby you pay regular payments at PayPoint outlets.

Both systems operate on the ‘six months in advance’ principle, with the money held in the government’s Consolidated Fund account, from which the BBC receives a monthly payment.

Considering this amount of TV licences, our calculations show that a massive £1bn of extra payments is earning interest in the government’s coffers.

Protecting the BBC from losses

A government spokesperson told Which? that the system provides ‘an alternative to an annual lump sum payment, while also protecting the BBC from losses incurred if payments stop before the whole amount has been collected’.

Well, I have an impeccable track record of paying my bills on time, so I don’t see why I should have to keep my account over £70 in credit just in case I default.

There are already hefty penalties in place for anyone who doesn’t have a TV licence. And there are plenty of households that could do with that £70 right now. The government shouldn’t be cross-subsidising the cost of non-payers using the money of the responsible majority who choose direct debit.

Comments

Jane is absolutely right.

After the fiasco I am having with them at the moment I wonder how many people they do this to?
I rang up last Thursday as I received a letter to say I didn’t have a TV License. Couldn’t understand it but somehow the DD had gone wrong so I said I would pay with my Debit Card for this month and sort the DD out with the Bank.

The person on the phone whose name I have took the whole amount as I was speaking to him about paying this month with my Debit Card and sorting out the DD. He had no authority to do this. I did not authorise it. I am now so annoyed as they said they would listen to the recording of the call (which I was pleased about) and ring me back last Friday to let me know if they were sending me a cheque for the full amount and then I would resume paying from July by DD. Guess what? No call. And they have also put a DD on my bank account.

How good is that? They have taken the full amount. Don’t know if they are sending it back to me?
If I leave the DD on my Account they will take that as well. I will try again to get some sense out of them in my Lunch Break.

I wish no one would pay for the License !!!!!!!!!!!!!!!!!!!!!!!!!

What would happen then. Think they would have to rethink and not be so greedy!!!!!!!!!!

Richard says:
4 August 2014

Here’s one for you to think about and comment on. I really think this sums up the stupidity of the whole system.

I am 6 months away from the age of 75 and am looking forward to my well earned free TV licence – this is the last of the free to claim options for pensioners as most other you can claim from 65 or earlier, but I will settle for this change in 6 months.

Two weeks ago I contacted the TVL authority to tell them I was going to cancel my Direct Debit as I’m six months in advance and this would cover me up to the age of 75.

Guess what I was told – I have to pay up to 75 and then declare I am 75, at which point they will refund me the 6 months. Obviously I asked the person at the other end ‘what planet’ he was from – sorry, but it did irk me a little, but he explained that the ‘system’ wouldn’t allow him to declare I was 75, six months early, so there was no way around it.

I told him that I was going to cancel the DD anyway and he started to warn me that I could be challenged for not paying for the licence. I finished with take me to court and then see how stupid you look when its found that I have paid to the end of my need for a licence – what a crazy world!

Sannas says:
5 January 2015

I do have a major issue with the way that the BBC and the government conduct business in regards to licencing. Its an archaic Idea that to be honest doesn’t fit in the modern world of business. I agree that people shouldn’t have to sit six months in advance for services not yet received. Other broadcasters have a proven track record that this is not a necessary way to carry out business, and lets be honest you get far more for your money in comparison. Looking at the BBC’s financial reports the average time spent utilizing all of BBC’s services is 18.5 Hours per week. For all those quoting maths as their forte as if they are something of a genius to all the minions below them then I would like you to consider this, if the 18.5 hours average is accurate and un-biased, then this is something you should consider – The BBC offer 27 channels in total for effectively £12.13 per month based on the Annual charge, compare this to Sky’s current base package of 275+ channels including the BBC, which I would like to remind you SKY charge you for as they HAVE to pay the BBC to re-broadcast(Making all those sky box users out there pay for BBC twice) at the price of £21.50 per month base package. Virgin Media offer 70+ channels including the BBC for £18 per month(Again virgin media charge you for the ability to watch the BBC as they are charged re-broadcasting fees). I could take other broadcasters but lets just stick with these 3.

The term channel doesn’t necesarrily refer to a tv broadcast, your licence also pays for the radio stations.

These charges are per month
BBC per channel cost £0.45
Sky per channel cost(inc BBC)* £0.08
Virgin Media per channel cost(inc BBC)* £0.25

*These are based on base package prices, higher prices incorporate bigger discounts.

Ok so thats one area that I feel the BBC isn’t value for money but lets go back to the 18.5 hours average time spent on any of the BBC services per week. For me this statement is a massive over exageration but its an average so I must be one that is below average. However when looking this goes a little further when you look at a 2011 report BBC news carried out, it stated that industry figures suggest people watched 30 hours of television in general per week, the BBC carried out their own poll which suggested it was more along the lines of 20 hours per week. Now I wont jump the gun here as there is reportedly an average of 23 hours per week spent listening to the radio in 2012 and the BBC have a portion of this. I know the figures aren’t 100% accurate but I feel that over a 3 year period the averages aren’t going to have dramatic changes. So you can say they will serfice, if you agree then the BBC are claiming roughly 35% of all viewing be it visual and audio or just audio by the populace just to the BBC services alone, I think you have to agree thats quite an astounding claim when their are roughly 362 radio stations nationally, including the BBC’s 17 and Sky offers 560+ English channels(not including HD replacements) which also includes BBC’s 10 channels.

But lets move on, because the BBC now have their on demand feature, you are now obliged to buy a full colour TV licence if you own a smart phone, because you can receive BBC on demand on your phone, this applies to any electrical device that has the ability to pick up any kind of internet signal. This blew me away to be honest as, I was told this by someone at TV licensing, which divulged into my accusations of ‘Air Tax’ due to a statement he made that any broadcast over cable or air was subject to TV licencing.

Lets take that paragraph one step further for any other country around the world – “the BBC sells broadcasts to other countries and people watch them for free”, was what someone else has stated. Well this isn’t strictly true BBC broadcast’s in other countries are often interupted by advertising, if not then they are premium service’s added at a cost like sky movies are to us here. But heres the interesting fact, a lot of people from other countries circumnavigate any fees locally by using proxy servers to appear in the UK(genius). So who picks up the bill for that? You do again as the BBC charge you for everyone else who can watch for free.

If you leave the house your living in and move in with a partner, or move abroad the BBC will not re-imberse you fully for what you have paid in advance like you get with car tax.They will only refund quarterly expenditure so you have to be nice and generous and give the BBC up to a 3 month tip for their service. Now this is another thing that the TV licencing crowd are very good at ripping people off with.

Bottom line is the BBC/TV Licencing are making money hand over fist for lets be honest not the greatest TV in the world. It once was considered to be the best but everyone else has since caught up in quality in my opinion. And to believe its the best is a little set in your ways, and a strong supporter of an organisation that strips the people of the UK of more money than it should.

Jan Simpson says:
30 November 2016

All dead on the ball and what stopped me from paying to the beeb is all the blatant propaganda, most worthy of what they used to accuse Russia of. I’m sick of paying the beeb news channels to filter out the real news and feed us with government b******t. If they want to do Sports news instead of real news (distraction reporting) they can do it without my contribution. Pwthhtt.

Robin says:
2 September 2015

There’s a lot of waffle going on…

Weighing up this system vs that system is irrelevant to me, all I know is that the government get enough off me as it is without me giving them 6 months money for nothing! I don’t listen to the radio and I don’t watch the BBC at all so I think the license fee should be scrapped and the BBC racketeering outfit privatised completely anyway!

Back in the days of the 40,s-50,s-60,s the BBC had a high reputation for high quality investigative -travel documentaries -World views impartially put it was unrivaled . Sorry to say the BBC has “gone down the tubes ” or more appropriately it has sunk down to US consumer level which even Americans admit is very low intellectually. I say sorry because I was an avid BBC watcher but it is now a propaganda mouthpiece for the government totally one-sided anti-poor-sick-old (still not as bad as Channel 5 which makes out all poor are lazy etc by their anti-poor programmes-funny no anti-rich ones -why ?? .The mantle of the BBC has been taken over by Germany and its superior -high class news /documentaries etc I watch it regularly on Astra 19 E satellite I never watch UK channels as they is so low brow and lies are told by emission and no I am NOT a snob !! just look back to when the BBC was impartial and wasnt scared to criticise the government. so I too cant see any real case for a license fee I dont like paying for propaganda.

macy says:
11 May 2016

Can I stop tv licence payment after 6months when my licence will be payed for. I would rather save the money for my licence, didn’t know the facts when I decided to pay by direct debit.

Dino says:
7 August 2016

I cancelled my license in 2011 and got 6 months refund this time I got just 3 months refund yet I have paid 6 months in advance. I was notified in March that my license was ready to view, they owe me two or three months license fee either that or I will watch the TV and sod them for 3 months

James Collier says:
3 September 2016

I have gone against what the TV licencing want and have been paying £15 per month since the start. They have now put a company called Akinika on to me threatening to take me to court and saying I owe £42.30. I have sent an email back stating I am paying my TV Licence but am not willing to pay in advance.

I have said that they can feel free to take me to court on the matter as they cannot say I don’t pay as I do, I just don’t pay 6 months in advance.

Dean Tyrell says:
12 September 2016

To add to this debate, I want to point out that not only do they take £72.75 “as a deposit” which is what the a TVL help desk operative called it when I phoned them, but they don’t even refund that money automatically when you die and your account is closed by a surviving family member. It is conveniently forgotten about.

I can vouch that this is the case as my partner died suddenly two years ago, and when I cancelled her license that was in her name, I had to open a new one at the same address in my name and opted for the monthly payment system. After six months I had paid for the license with 6 x £24 installments, then was told I ‘d have to pay for next years in advance with 12 x £12 payments that my partner had been paying previously. Alarm bells rang. Big ones. Where was her over payment “deposit” refund? Her license had been cancelled for over 6 months, and the family had never received any refund payment nor any letter stating a payment would be made. The TVL knew she had died, as I had informed them. They simply kept the money. I was disgusted, and phoned them making them aware of this, and demanded an immediate refund. A few days later I got one, but only after a pretty fiery complaint, as I was recently bereaved so not in the mood for bureaucratic BS.

It’s pretty sad that they did not issue it automatically, knowing this account holder was deceased, and that a surviving partner that had already contacted them was dealing with her affairs, so therefore could be reimbursed. I wonder how much money the Gov and the BBC are sitting on in unpaid refunds to dead people, and to people that don’t need a license now and just don’t realize they have overpaid?

It’s nasty business. I hope others that have had family members die and not been refunded read this, and call TVL and get their money back.

Jan Simpson says:
30 November 2016

I have just found this out, just had a letter from them telling me I have missed a payment of £7.50. I have NEVER had an arrangement of this amount to them but I was in arrears on my last licence which I paid up to the collection agency they put in charge. As far as I was concerned I am fully paid up. I rang the collection agency and they confirmed this. My licence is valid till February next year. They got through to TV licencing who consequently “hung up” on them and I was given a direct number to ring through to. Rang that. Was told “Oh yes, you have a current licence but we have started a new licence as from when your last payment came in” SO they are taking payments in advance illegally. They made no fuss when I said “OH NO YOU’RE NOT! YOU CANCEL THAT IMMEDIATELY!!!
[This has been edited to fit with our community guidelines https://conversation.which.co.uk/commenting-guidelines/. Thanks, mods.]

Jan Simpson says:
30 November 2016

Just how many poor people are they suckering in to this illegal payment system? The girl I spoke to in TV licencing said “its the law”. I said “you can’t charge somebody for a future event they haven’t had yet”