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Further IR35 irony as 25 DoH staff paid via their own limited companies
Posted Feb 16, 2012
The Guardian has obtained leaked emails which suggest that more than 25 Department of Health staff are paid via their own personal companies, rather than by the more traditional tax route, suggesting that the Government is allowing the use of limited companies to minimise tax, whilst simultaneously enforcing IR35 which was designed to penalise exactly this type of employment arrangement.
According to an article in the paper today, the Department of Health has apologised and has even claimed that the individuals in question were not 'employees' per se, although most of them have been Department employees in the past.
Some of the individuals have been paid over £250,000 per year, with the entire annual bill for the group reaching £4.2m.
In most cases, the personal companies are registered as consultancies at the staff members' personal addresses. The individuals themselves work in a wide range of positions within the Department, from the medical directorate to the Chief Scientific Officer.
This news follows on from news that the boss of the Student Loans Company, Ed Lester, had also been paid in a similar way until Danny Alexander ensured that he rejoined the payroll.
The Chief Secretary to the Treasury also ordered a full audit across all Government departments to establish how many other 'staff' members were being paid via their own limited companies.
The irony hasn't been lost on the contracting industry. After all, IR35 was designed specifically to target individuals who left a traditional job one day, only to return subsequently as a limited company director - performing the same duties as before.
It would seem very likely that the Department of Health leak is just the tip of the iceberg, and we look forward to further revelations!
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