Our finances

Income

In 2025/26 BBC Group income totalled £5,962 million, an increase of 1% on previous year (2024/25: £5,900 million).

The licence fee remains the single largest source of income. This year we collected £3,879 million of licence fee income, an increase of £36 million year-on-year, largely driven by the licence fee price increase to £174.50 from April 2025.

The majority of our audiences remain committed to paying the licence fee with 23.3 million licences in force at the end of the year, however we continue to see a downward trend in sales with 539,000 fewer licences in force in place at 31 March 2026 compared to the prior year. Further detail on licence fee income can be found in Note B2 of the financial statements.

Licence fee income is supported by other income streams including income generated through commercial activity and external sources. In 2025/26, other income, after inter-group transactions totalled £2,083 million (2024/25: £2,057 million).

Amidst challenging trading conditions BBC Commercial, including intra-group transactions, sustained revenue at £2,155 million in 2025/26 (2024/25: £2,155 million). See the Commercial Operations report for further information page.

The Foreign, Commonwealth and Development Office (FCDO) continues to invest in the BBC World Service with grant funding of £137 million received in 2025/26 (2024/25: £104 million).

In addition to the annual grant funding, an exceptional one-off payment of £5 million was received in March 2026 to support critical activity in early 2026/27.

Grant funding of £148 million per annum has been confirmed for the three years to 2028/29, which will enable us to continue supporting BBC World Service output in English and Languages.

In November 2025, the National Audit Office (NAO) published its value-for-money report on the World Service’s savings programmes. The NAO identified areas for improvement in the World Service’s approach to setting up and implementing savings programmes. We have accepted the recommendations from the NAO’s report which will improve the World Service’s approach to future savings programmes.

BBC Group Income Statement

Licence fee collection

Effective financial management is a key part of the BBC’s unique relationship with our audiences. This includes spending the licence fee efficiently and collecting a television licence fee from everyone who is required to purchase one.

The collection of the licence fee is underpinned by a legal requirement to buy a licence if watching or recording programmes as they are being shown on any TV broadcast service; viewing live streams via an online TV service; or by downloading or watching programmes on BBC iPlayer (live, catch-up or on-demand).

The BBC has a number of contractual arrangements covering the collection, administration and enforcement of the licence fee, marketing, payment channel management and retail networks. The majority of the administration is conducted by Capita Business Services Ltd with contracts in place until 2030.

We offer a variety of payment methods including in-store, by telephone and online.

We continue to support those suffering severe financial hardship by offering the Simple Payment Plan, a flexible payment scheme that spreads the cost of the licence fee over 12 months. Free TV licences funded by the BBC are available to anyone aged over 75 who is in receipt of Pension Credit*.

(* Licence holders who are over 75 and a resident in an Accommodation for Residential Care scheme with Preserved Rights are also eligible for a free licence. For the Crown Dependencies, equivalent arrangements were put in place, starting from 1 January 2021, based on local benefits.)

The current collection method remains fair, effective, and good value for money. In the next Charter a modernised funding model is essential. The current system – where 94% of adults use our services each month but fewer than 80% of households contribute – is no longer sustainable. Whilst we remain open‑minded about specific mechanisms, we are clear on the principle: a universal public service requires a universal funding model.

Licence fee statement

We prepare an annual licence fee revenue statement, which is audited by the NAO on behalf of the Comptroller and Auditor General. This statement sets out the amounts collected and paid over to HM Government during the year. Alongside their audit work, the NAO examines our collection arrangements and reports on them to Parliament. More on the licence fee revenue statement can be found on the TV Licensing website.

BBC Group I&E deficit

In 2025/26, the BBC Group delivered a deficit after tax of £121 million (2024/25 deficit: £112 million) against a planned deficit of £33 million as published in our Annual Plan. The outturn for 2025/26 has been adversely impacted by a number of factors including lower than anticipated licence fee income.

Across the Group we continue to carefully manage our costs to ensure value to the licence fee payer, which this year allowed us to release additional in-year funding for strategic priorities. Furthermore, planned operating expenditure savings for 2025/26 were instead delivered through working capital savings, which has increased the deficit after tax.

Our public service funding remains focused on creating and distributing content for audiences across a range of services, with total spend of £3,593 million incurred in 2025/26 (2024/25: £3,592 million). Below is further analysis of our public service broadcasting expenditure.

In 2022/23 we began a programme of savings and reinvestment to manage the impact of the 2022 licence fee settlement and enable investment in high-impact content and digital products to improve user experience, as well as to manage inflationary cost pressures. The plan targeted £700 million of recurring savings by 2027/28.

To date, we have delivered £715 million of savings, of which £602 million are ongoing. From 2026/27 our savings targets will report both the new £500 million savings task and delivery of the final of recurring savings required to achieve the ‘£700 million plan’.

BBC Commercial continues to drive financial returns to the BBC which totalled £377 million in 2025/26 and mainly comprising of dividend and content investment (2024/25: £391 million). The Commercial Group remains on track to meet its five-year target to deliver £1.5 billion by 2026/27.

Cash and net debt

BBC Group cash reserves at 31 March 2026 were £257 million (2024/25: £477 million). of which £125 million is held by the public service (2024/25: £369 million). As planned, the drawdown of cash reserves has funded transformational costs and enabled investment in high-impact content and digital products in line with strategy.

BBC Group net debt including lease borrowings at 31 March 2026 was £1,956 million (2024/25: £1,616 million), well within our total borrowing limit of £3,050 million, which includes £2,200 million specifically for lease obligations. Borrowing limits are set by the Secretary of State for Culture, Media and Sport in accordance with the agreement between the BBC and the Department for Culture, Media and Sport.

Further detail on our cash and borrowing can be found in Notes G2 and G3 of the financial statements.

Pension costs

We continue to review the shape of our future pension provision offer. Any proposals for change would be subject to consultation with employees and we will work with our Trade Unions in shaping pension provision.

The most recent actuarial valuation of the BBC Pension Scheme (‘the Scheme’) estimated a funding surplus of £296 million and a funding level of 102% (on a technical provisions basis) as at 1 April 2024. This was the first time the Scheme had been in surplus since 2007.

Under a revised schedule of contributions approved as part of the 2024 actuarial valuation, we agreed with the Scheme to pay a deficit recovery contribution of £125 million to the Scheme by the earlier of 1 July 2027 and the date on which the 2026 actuarial valuation is completed.

This payment will not be required, though, if a replacement schedule of contributions into the Scheme is put in place that does not include the £125 million payment. This provision is designed to help protect the Scheme against the risk of reversal of the recent improvement in the funding position.

The need for us to pay any other deficit recovery contributions to the Scheme was removed in the 2024 actuarial valuation.

Fixed future service costs reduced from 18.3% of pensionable salaries in the first half of the year to 11.5% from October 2025. A rate of 15.9% of pensionable salaries will be applied from April 2026 until June 2030.

We are currently working with the Trustee to complete the actuarial valuation as at 1 April 2026 process, including an updated schedule of contributions, by no later than the statutory deadline of 30 June 2027.

Accounting standards (IAS 19 Employee Benefits) require an annual accounting valuation of the Scheme, which at 31 March 2026 resulted in it being revalued to a surplus of £490 million (2024/25: £868 million) driven by a remeasurement loss on scheme assets.

The accounting valuation provides a ‘snapshot’ at the year end and is therefore sensitive to short-term market fluctuations. The accounting valuation often presents a more favourable funding position compared to the actuarial valuation due to the discount rates used – however, the accounting valuation does not impact the cash contributions we need to make into the Scheme.

Tax strategy

We are committed to paying the right amount of tax at the right time in all the jurisdictions in which we operate, including but not limited to employment tax, VAT, and corporation tax. We recognise the importance of paying the right amount of tax for the communities in which we operate and take our tax compliance obligations seriously.

We manage our tax affairs within the framework of the tax legislation for the UK and the other jurisdictions in which we operate. The BBC has a low tolerance to tax risk. Our assessment of tax risk considers not only the financial amount at stake, but also the reputational consequences of the matter in question.

The political, legislative and reporting environment is becoming increasingly complex across a number of key territories around the world.

The Group is in the scope of the Pillar 2 global minimum tax rules from 2024/25. These apply a minimum 15% effective corporate income tax rate in every profitable country with any top-up liability payable in the UK. Current tax would include the Group’s charge for any Pillar Two income taxes.

However, based on assessments of the Group’s performance and the exemptions that are available a material tax charge for the year should not be required and any tax charge is likely to be trivial or zero.

From an accounting policy perspective, the Group applies the exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes, as provided in the amendments to IAS 12 Income Taxes issued in May 2023. It is likely that the cost of compliance will be significantly higher than any top-up tax payable.

We publish our tax strategy in accordance with the Finance Act 2016, which can be found on About the BBC.

Public service broadcasting expenditure

The table below illustrates how the public service have spent licence fee funds during the current and prior year, including the Charter requirement for the BBC to report on expenditure on the UK Public Television Services by genre (as defined in accordance with industry standards).

From 2025/26, the presentation of public service broadcasting expenditure analysis has been updated to better reflect audience consumption with 2024/25 comparatives restated. Total audience spend reflects the cost of making and delivering content to audiences. Total public service expenditure includes spend on content along with the corporate costs of running the BBC and fulfilling its obligations.

* From 1 April 2024, the cost of children’s programmes are recognised over the estimated average contract period to better reflect children’s consumption patterns. See note E for further details.

** BBC World Service Operating Licence in the table above reflects expenditure funded by the licence fee. When including spend from other income sources and an allocation of support and overhead costs, BBC World Service Operating Licence expenditure totalled £223 million in 2025/26 (2024/25: £264 million).

*** In order to reflect the full cost of public service broadcasting spend, certain costs (i.e. finance lease interest) are included within total expenditure above. These costs are reported outside of operating costs in the financial statements as per note B1.