Tax Avoidance by Treasury Employees

Glen Oglaza
February 01, 2012 8:34 PM

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It's emerged that Ed Lester, Chief Executive of the
Student Loans Comapny, is being paid as a company not as an individual -
allowing him to pay less tax (corporation tax at 21% rather than income
tax)

While this is fairly common in the private sector, is it
acceptable in the public sector?

Chief Secretary to the Treasury Danny Alexander signs
off all salaries over

£140,000, and he approved Mr Lester's package of £182,000 - which
includes a £14,000 bonus and a pension contribution
of £28,000 on top of his basic salary.

Mr Alexander has ordered a Treasury investigation to discover how
many other public employees have similar deals.

He wants a report by the end of next month.

Danny Alexander has often insisted that everyone should pay "the
right tax", and that tax avoidance, while legal (unlike tax evasion) is
nevertheless wrong.

I am told that Mr Alexander is "uncomfortable" with Mr Lester's
arrangemnt.

The Teasury has released a statement saying this: "In the case of the
Chief Executive of the Student Loans Company, the Chief Secretary approved the
overall pay, at a reduced rate and in a continuation of the interim arrangements
previously agreed. The Chief Secretary was not made aware of any potential tax
benefit to an individual.

"The Chief Secretary has now asked the Treasury to urgently review
the appropriateness of allowing public sector appointees to be paid through an
agency by a personal service company.

"The Chief Secretary has also written to Secretaries of State
notifying them that he has asked the Treasury Officer of Accounts to write to
Accounting Officers to remind them that appointments should, in line with
existing guidance, consider the wider cost of lost revenue to the exchequer when
considering value for money.

"In addition he has asked them to carry out an urgent internal audit
to ensure that all senior consultancy appointments provide value for money in
this regard. This will be completed by the end of March 2012.

"As he has said before, the Chief Secretary believes everybody should
pay the right tax at the right time."

A spokesman for the Student Loans Company said Mr Lester's pay deal
was cheaper for the taxpayer than when he had originally been hired on an
interim basis.

The company had "followed all government guidelines on the
appointment and remuneration" of Mr Lester.

A Business, Innovation and Skills spokesman added: "The Department
adopted the correct processes and was satisfied it had come up with a package
that met the relevant guidelines including value for money. "


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One of the comments.
Posted by: GJC-BOURTIE on February 2, 2012 12:09 PM

Apparently the CBI spokesperson doesn't want to see people with ''their heads on spikes''.(In reference to Mr. Hester's bonus)
Hmm.
Well don't use such stupid language !!

The National Debt is £1 trillion.
Since May 1979, there has been tax avoidance and tax evasion, let alone, favourable perks, allowances, VAT rebates etc etc.
Even a conservative estimate of £20 billion a year would pay off half our debt.

Now you know where the money's gone what are you going to do about it ??

Recomme

Panda

Was just going to post The Telegraph article on this lucrative agreement as regards salaries being paid to Ministers.

Talk about evasive measures for not paying the tax they as Civil Servants instigate!!!!!!!!

Danny Alexander actually signed them off as well. Then I saw a snip on Channel 4 News of him declaring, in Parliament, that all such contracts (so there's more) will be terminated. It's says in The Telegraph "that the "arrangement" followed all governmental guidelines on the appointment and remuneration of Mr Lester" - if that's the case then the guidelines are wrong and should be reformed - a little bit like the Expenses Rules. So I expect that in due course it will be re-instated in another form at a later date.

Not forgetting of course that "we are all in this together"!

Angelique wrote:Panda

Was just going to post The Telegraph article on this lucrative agreement as regards salaries being paid to Ministers.

Talk about evasive measures for not paying the tax they as Civil Servants instigate!!!!!!!!

Danny Alexander actually signed them off as well. Then I saw a snip on Channel 4 News of him declaring, in Parliament, that all such contracts (so there's more) will be terminated. It's says in The Telegraph "that the "arrangement" followed all governmental guidelines on the appointment and remuneration of Mr Lester" - if that's the case then the guidelines are wrong and should be reformed - a little bit like the Expenses Rules. So I expect that in due course it will be re-instated in another form at a later date.

Not forgetting of course that "we are all in this together"!

Hi Angelique, doesn't it make you sick , first of all Ministers fiddling their expenses now civil servants avoiding paying Tax.....is there no area of
Goverment which is not corrupt? Meanwhile, almost 3 million unemployed are trying to live on the dole.

Panda

Indeed, what of all those who are suffering with the loss of their jobs!

In the comment that you have included in your second post - it talks of heads on pikes - Fred the Shred losing his Knighthood (and why not after driving RBS into the ground) - I do wonder how far Cameron is willing to go to assuage the backlash that is brewing about the unfairness in our Society. I can't help thinking that unless he does sacrifice some of the so called "cuts" ( which by the way is also referred to in The Telegraph next to this Lester debacle) that barely 10% have been instigated so far. The Government may see the English Spring on the streets after all. The question is - how many victims has he got and is prepared to sacrifice!

TAX AVOIDANCE BY PUBLIC SERVANTS,WHO EVER COULD HAVE IMAGINE THAT,WHAT NEXT?

Angelique wrote:Panda

Indeed, what of all those who are suffering with the loss of their jobs!

In the comment that you have included in your second post - it talks of heads on pikes - Fred the Shred losing his Knighthood (and why not after driving RBS into the ground) - I do wonder how far Cameron is willing to go to assuage the backlash that is brewing about the unfairness in our Society. I can't help thinking that unless he does sacrifice some of the so called "cuts" ( which by the way is also referred to in The Telegraph next to this Lester debacle) that barely 10% have been instigated so far. The Government may see the English Spring on the streets after all. The question is - how many victims has he got and is prepared to sacrifice!

I sense a change in reporting on the McCanns , maybe the Met will now go out of their way to get a result on the Review and be honest.

Badboy wrote:TAX AVOIDANCE BY PUBLIC SERVANTS,WHO EVER COULD HAVE IMAGINE THAT,WHAT NEXT?

It's like a Cancer Badboy, I'm sure anyone with a lot of money is determined to keep it and the richer you are, the more ways there are to avoid Tax. Until the Government plugs the Loopholes this will continue.

Panda wrote:

Badboy wrote:TAX AVOIDANCE BY PUBLIC SERVANTS,WHO EVER COULD HAVE IMAGINE THAT,WHAT NEXT?

It's like a Cancer Badboy, I'm sure anyone with a lot of money is determined to keep it and the richer you are, the more ways there are to avoid Tax. Until the Government plugs the Loopholes this will continue.

You don't have to be rich to avoid paying tax like this, Panda. Teaching agencies and social care agencies offer employees a choice of how they are paid nowadays: on PAYE or paid by a separate company that will set up the individual as a company. I was a company when I worked for one teaching agency. I sent my weekly hours and expenses to the payroll company and they did a lot of jiggery-pokery and I ended up paying less tax. After a while, I swapped back to PAYE because it was simpler, but that resource is on offer by so many agencies these days.

AnnaEsse wrote:

Panda wrote:

Badboy wrote:TAX AVOIDANCE BY PUBLIC SERVANTS,WHO EVER COULD HAVE IMAGINE THAT,WHAT NEXT?

It's like a Cancer Badboy, I'm sure anyone with a lot of money is determined to keep it and the richer you are, the more ways there are to avoid Tax. Until the Government plugs the Loopholes this will continue.

You don't have to be rich to avoid paying tax like this, Panda. Teaching agencies and social care agencies offer employees a choice of how they are paid nowadays: on PAYE or paid by a separate company that will set up the individual as a company. I was a company when I worked for one teaching agency. I sent my weekly hours and expenses to the payroll company and they did a lot of jiggery-pokery and I ended up paying less tax. After a while, I swapped back to PAYE because it was simpler, but that resource is on offer by so many agencies these days.

Morning AnnaEsse, I worked as a Company and Trust administrator in Jersey . an off shore tax haven , many moons ago and the well known people who
had set up trusts there would amaze you. The Trusts were paper thin in that if you set up a Trust you were not supposed to be a Beneficiary nor
instruct the Trustess what to do. After I left Jersey friends told me there was a big shake-up ,staff had to be qualified and the administration of the
Trusts more honest. By the time the Administration of the Trust Fees were taken out , I was very moral and thought "why don't youi just pay your taxes
like everyone else"??because it was costing so much to keep it going.

This is another interesting sub-article which appeared in the same one as your original post but unfortunately I can't find it in the online version so I got this one from Express & Star

£72,800 cost of Whitehall away-days
Wednesday 1st February 2012, 10:10AM GMT.

http://www.expressandstar.com/uk/uk-news/2012/02/01/72800-cost-of-whitehall-away-days/

Read more: http://www.expressandstar.com/uk/uk-news/2012/02/01/72800-cost-of-whitehall-away-days/#ixzz1lLJowy6o



Hundreds of Whitehall civil servants were taken on staff away-days at taxpayers’ expense, the Government has said.

The team-building sessions at a Premier League football ground, a wetlands centre and in upmarket hotels cost a “staggering” £72,800.

They were organised by Chris Huhne’s Department of Energy and Climate Change (Decc), which sparked outrage last year by cutting solar power subsidies.

A total of 1,800 staff attended 42 “performance improving” and “skills enhancing” days out at venues across Britain.

Shadow energy minister Luciana Berger, who uncovered the figures using Parliamentary questions, said: “It’s staggering that the same out-of-touch ministers who are putting thousands of people in the solar industry out of work are shelling out for lavish away-days.

“Ministers need to explain why Decc is spending thousands of pounds of taxpayers’ money paying for private members’ clubs, Premiership football stadiums and lavish hotels.

“There was even an away-day to plan for another away-day. It shows David Cameron’s claim to ‘wage a war on waste’ was pure fiction. If this level of spending has been replicated across Government the bill could be well over £1 million.”

Ms Berger urged the Prime Minister to “come clean” and publish the details of every department’s away-days.

Figures showed Mr Huhne’s department spent £1,300 taking 30 workers from the “strategy directorate” to Fulham FC’s Craven Cottage ground in south-west London last January; £2,600 on two trips to the Royal Society to discuss “priorities and risks for the year ahead and working better as a team” in September and “a directors’ business planning meeting” in November; £7,000 in July 2010 taking 105 workers to the London Wetlands Centre; and £1,200 on a finance team away-day for 35 staff in the run-up to last Christmas.

Energy minister Greg Barker defended the bill, saying: “Away-days are an investment by teams in planning, improving performance or enhancing skills and business relationships. The change of environment and the time spent together without distractions allows teams to focus on their challenges.”



Read more: http://www.expressandstar.com/uk/uk-news/2012/02/01/72800-cost-of-whitehall-away-days/#ixzz1lLKMRTlJ

Hi Angelique......thanks for this, doesn't it make you sick when it's O.K. to cut Benefits , make over 1,000 Royal Navy personnel redundant etc yet MP's
canm spend all that money without a conscience.

BTW Huhne and his wife have been arrested. It appears that the incident which happened 9 years ago where Huhne and his ex wife colluded by saying she drove the car. They split last year and he has a new Partner so I suspect his ex outed him out of spite, little realising she would be arrested as well.