Thu, 2 Feb 2012

Government signs off tax avoidance scheme for top civil servant just one month after pledging a ‘tougher approach’

Civil Servant Ed Lester (pictured), the boss of the Student Loans Company, is avoiding paying tax on his £182,000 salary despite a government pledge to improve HMRC’s powers to stop such avoidance.

The arrangement was disclosed on BBC Newsnight following a Freedom of Information request. The scheme means his salary is paid gross to his private service company.

In January coalition leader David Cameron said: “I think we need a tougher approach [to tax avoidance] and one of the things we’re going to be looking at this year is whether there’s going to be a more general anti-avoidance power that HMRC can use, particularly on very wealthy individuals.”

Chief Secretary to the Treasury Danny Alexander was required to sign off the pay deal as he must do for all public sector salaries of more than £142,500.

He says he was unaware of the details and has ordered an inquiry.

See also:

• Troops fighting in Afghanistan will receive fines for late filing self-assessment
• Revenue says it has improved its post handling and contact centres
• HMRC defends confusing P35 reminder letters