Operation of The Licensing System
The licence fee is set by the Secretary of State for Culture, Media and Sport by the use of Statutory Instruments. The level of the fee is decided following periodic negotiations between the UK Government and the BBC Trust.
The BBC is authorised by the Communications Act 2003 to collect the licence fees. The money received is first paid into the Government's Consolidated Fund. It is subsequently included in the 'vote' for the Department of Culture, Media and Sport in that year's Appropriation Act, and passed on to the BBC for the running of the BBC's own services (free from commercial advertisements), and for the BBC to produce programming for S4C.
The licence fee is classified as a tax, and evasion is a criminal offence. Since 1991, collection and enforcement of the licence fee is the responsibility of the BBC in its role as TV Licensing Authority. The BBC pursues its licence fee collection and enforcement under the trading name "TV Licensing", but subcontracts much of the task to commercial organisations. A major subcontractor is Capita which specialises in outsourcing for government projects.
The licence fee can be paid annually, monthly or quarterly by Direct Debit, or monthly or weekly with a cash payment plan, which was introduced for those with limited means or no bank account, and replaced a previous scheme using trading stamps.
Payments made using Direct Debit carry an additional cost of £5.00 per year, or £1.25 a quarter, which is included in the licence fee total. This addition is described as "a small charge" in the generic letter issued by TV Licensing to those paying by Direct Debit, and on the TV Licensing website it is justified with: "Since the majority of the licence is paid for in arrears, your quarterly payments will include a premium of £1.25". Typically, direct debit schemes in the UK for major utilities or publicly provided services operate in a reverse way, granting a discount to direct debit payers.
In the United Kingdom, Guernsey and Isle of Man, free TV licences are available for households with a member aged over 75. This is funded in the UK by the Department for Work and Pensions, and in the Crown Dependencies by their respective governments. The States of Jersey did not initially opt to extend this concession to their island but free licences were later introduced for over 75s if they received an income under £13,000 for single people, or £21,000 for couples. In the Isle of Man, pensioners under 75 who receive income support can also get free licences. The funding is provided by the Isle of Man Department of Social Care.
Licences are half price for the legally blind.
Those aged over 60 and in residential care homes (including nursing homes, public-sector sheltered housing and almshouses) can get Accommodation for Residential Care (ARC) licences for £7.50 a year.
Read more about this topic: Television Licensing In The United Kingdom
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