Top civil servants’ tax avoidance loopholes must be closed

The the Student Loans Company (SLC) chief executive Ed Lester has his £182,000 salary paid gross to his private service company, potentially saving him tens of thousands of pounds in tax.

This clearly demonstrates the need for a review of the top pay for publicly funded posts.  How can we expect tax-loopholes to be closed for businesses when senior civil servants have been able to minimise their tax payments, at a time when the rest of the country is being urged that we are “all in this together”.

The payment method allows Lester to pay corporation tax of 21%, rather than up to 50% income tax on his earnings.  The overall pay arrangements, known to have occured with some BBC executives, are estimated by accountants to have saved him £40,000 a year.

Lib Dem chief secretary to the Treasury, Danny Alexander, was said to be unaware of the arrangement and has now asked Treasury officials to urgently review the appropriateness of allowing public sector appointees to be paid through an agency by a personal service company.

Danny said that “I have also written to my cabinet colleagues asking them to carry out an urgent internal audit to ensure that all senior consultancy appointments provide value for money.

“As I have said before, I believe everybody should pay the right tax at the right time … that is why I’ve taken this action.”

Lester, who lives in Buckinghamshire, also receives £550 a week to pay for his travel and living expenses and cover his costs of getting to the company’s offices in Glasgow.  I have no problem with people commuting to work, but the rest of us have to pay our own travel expenses.

I would again urge people to sign my e-petition calling for a cap on publicly funded pay at £200,000.  For this civil servant to have received a pay packed of £182,000 his actual pay would have been well in excess of the £200,000 cap.

I hope that a lot of people will now be inclined to sign the petition.

http://epetitions.direct.gov.uk/petitions/28464

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