David Farnor | On 26, Jan 2014

Thousands of Brits could be watching live TV on BBC iPlayer without paying the licence fee, the BBC has revealed.

The BBC’s on-demand service allows viewers to stream live shows as well as catch up on old programmes for free. But a loophole means that users can watch BBC videos online without paying the £145.50 annual charge and not break the law – as long as they aren’t watching live TV.

Indeed, 429,359 signed declarations last year that they did not need a TV licence. But the BBC acknowledges that they have no way of tracing whether people are acting within the law because it has no access to data from UK Internet providers. Up to 2 per cent of households in the UK could be watching live TV through iPlayer without paying a fee, which means the BBC could be missing out out on almost £65 million in unpaid fees.

The news arrives as the BBC announces record levels of traffic for iPlayer. Over Christmas, downloads reached new heights of 102 million, while New Year’s Day saw 11 million requests for TV and radio programmes, a surge of 35 per cent compared to 1st January 2013 and the busiest day in the site’s history.

But as iPlayer leads the way in the digital age of on-demand viewing, the figures reveal just how behind the times the licence fee is. There have been calls for years now to scrap the fee altogether, which would leave the BBC – a vital, independent organisation – without funding, or at least change the way it is charged. With the BBC charter up for renewal in 2016, the broadcaster has admitted to the government that the fee may need to be modernised to adapt to shifting audience habits.

“The licence fee definition remains robust, with only 1-2 per cent of households consuming exclusively on-demand content and so not requiring a licence fee. However, the definition could start to create perverse incentives, with a fee payable for some ways of consuming BBC TV but not others. We would welcome discussing this issue with the committee to consider whether and when the licence fee should be modernised again,” the BBC wrote to the Department of Culture, Media and Sport.

Despite the loophole, though, there still appears to be broad public support for the paying of the fee. “Households declaring they do not need a TV Licence have remained stable for the past three years,” the BBC told The Daily Mail.

“Reasons a licence may not be required include if the address is unoccupied, if no TV receiving equipment is being used, if a TV is used only to watch DVDs, or if only catch up services are used.”

Do you think people who only watch catch-up TV on BBC iPlayer should pay the licence fee? Vote in our poll – or leave a comment below.

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