More than 25 senior staff employed by the Department of Health have salaries paid to limited companies enabling them to reduce their tax bills.
Leaked emails sent to the Guardian showed that in some cases the named individuals are being paid more than £250,000 a year, as well as additional expenses.
The emails reveal the majority of the fees were paid to companies with the same address as the home address of the staff.
Many of the companies are registered as business and management consultancies, yet the internal payroll information also details the health department offices in which they work, job title and email address. In most cases the companies’ names are very similar to that of the individuals’ surnames.
The emails also reveal senior civil servants at the Department discussing the possible reputational damage to the Department and seeking to avoid ways of revealing the nature of the payments sought in a written question last December by Gareth Thomas, the shadow Cabinet Office minister.
The arrangements would enable the individuals involved to save thousands of pounds a year in income tax and national insurance contributions by only being taxed at the corporation tax rate of 21 per cent.
This follows on from the recent revelation that the Department for Business, Innovation and Skills had sanctioned a similar salary deal for Ed Lester, the chief executive of the Student Loans Company.
At the time, the Health Minister Simon Burns said in a written parliamentary answer that no payments were being made to civil servants in this way. However, in light of the leaked documents the Department’s spokeswoman apologised for the misleading information but suggested that the individuals involved were not civil servants, or technically even staff, despite having been employed by the Department for a number of years in senior positions.
A Whitehall-wide review into tax arrangements of public sector appointments, initiated after the Ed Lester revelation, will be carried out this month.
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