This is taken from The Guardian:

BBC changes staff tax regime
by Chris Tryhorn
Wednesday February 15, 2006

BBC foreign staff who have been enjoying low tax rates abroad now have to pay as much as their UK-based counterparts under a new scheme introduced by the corporation.

The BBC has changed its tax arrangements for overseas staff so that everyone now pays the equivalent of UK tax rates.

That means staff working in countries that take a smaller proportion of employees' incomes in tax now have to pay the BBC the difference between local and UK rates.

"Basically, you still pay local tax," said one BBC insider. "But if it's lower [than UK rates] you pay the BBC the difference between that and UK tax. It's not going to the taxman obviously - it's going to the BBC coffers."

Some staff have been stung by the change, as they believed they deserved their old tax break to reflect the lower living standards in countries with lower tax rates.

In Britain, the basic rate of income tax is 22%, with a top rate of 40%. But in some countries rates are lower - such as Romania's 16% flat rate or the 20% payable in Saudi Arabia.

The BBC said that it had made the change to make tax arrangements fairer for all its staff.

"We introduced a tax equalisation policy in October 2005 - this is a standard policy for companies with overseas staff and aims to create simpler, fairer system," a BBC spokesman said.

"As regards people who were on the previous arrangements, that only applies to a handful of people."

The change has affected only those staff who have started in an overseas post since October.

For staff working in higher tax regimes, the BBC offers compensation for the extra tax they have paid, so they end up taking home what they would have earned under the UK tax system.

These arrangements have been unaffected by the change in tax policy instituted in October.

The change is the result of a review the corporation embarked on in the late 90s and is unconnected with the programme of cuts instituted by the director general, Mark Thompson.