TV licence 'overcharges' net £1bn

The Government nets £1bn each year thanks to double charges imposed on those who pay for their TV licence by direct debit, cash payment plan or monthly cash plan.

TV licence overcharge

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In an investigation employing Freedom of Information laws, Which? researchers uncovered the scheme, which charges householders double for the first six months of direct debit payments.

The practice of overcharging, which amounts to £70 extra for each householder, puts their accounts six months in credit - and puts an extra £1 billion in the Government's Consolidated Fund. The BBC then receives a monthly payment from the fund.

A standard TV licence currently costs £145.50 a year, but for the 14.7 million Brits already paying by direct debit, being double charged for six months may be a bitter pill to swallow.

Martyn Saville, principal researcher at Which?, was surprised to find that he would be charged twice the price when he took out a new licence.

He told the Daily Express: "This effectively means your 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 licence or you switch payment method and pay the fee in advance.

"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."

He added: "The Government shouldn't be cross-subsidising the cost of non-payers by using the money of the responsible majority."

The BBC insists the extra funds earned no "interest or other type of investment return" - and a Government spokesman said that the scheme offered bill-payers an alternative method of payment "while protecting the BBC from losses incurred if payments stop before the whole amount has been collected".

But John O'Connell, research director for the TaxPayers' Alliance, slammed the practice, saying: "These findings will come as a shock to hard-working families struggling to make ends meet who will often have no choice but to pay for their TV licence via a monthly direct debit."

What do you think? Should householders be forced to have their accounts six months in credit? Leave your comments below...