It was revealed on BBC Newsnight last night that Ed Lester chief executive of the Student Loans Company has been receiving his civil service salary via a service company in order to avoid PAYE. We do not believe that he is alone in receiving favourable tax treatment:-
We have some questions for the government and HMRC.
- How many other Full time civil service employees are paid via service company?
- Why did HMRC agreed no PAYE to be deducted?
- Why did Treasury agree (but unaware of tax deal) ?
- Why did HMRC made similar agreement with its IT officer ?
- Why are these cases apparently exempt from IR35
The discovery of the details of Mr Lester’s pay deal was made following a freedom of information request by Newsnight.
The payment arrangement for his £182,000 civil service salary to be paid to a third party intermediary (his personal service company) had also been approved by HMRC – twice. HMRC appears to have agreed this when he was engaged on a temporary contract, and then again when he was taken on full-time. He also receives £550 per week in travel expenses for his commute to work, also apparently tax-free.
Danny Alexander, the chief secretary to the Treasury signed off the pay deal, but seems unaware of what he agreed. It is reported that he has informed Newsnight he is now investigating further!