Readers may remember the news breaking on VB last year that some officers in senior roles at the Isle of Wight council were being paid through limited companies rather than on the payroll.
Mark Conrad from the excellent Exaro News, is reporting that top earners in local government have avoided a tax probe and contracts review.
It was thought that hundreds of officials who are paid through personal-service companies would be subject to tax investigation after questions were raised over head of the Student Loans Company, Ed Lester, being paid through a company rather than as an employee.
New guidance issued by Whitehall
However, according to the Exaro report, those plans have now been scrapped.
They say, “Despite pledges from ministers to crack down on councils paying senior staff through personal-service companies, they fell short of forcing town halls either to review – or halt – the practice.
“Instead, they have merely issued fresh Whitehall guidance on pay arrangements.
HMRC consultation
Earlier this year the HMRC kicked off a consultation into the taxation of ‘controlling persons’. This relates to those who work in controlling positions, such as Section 151 Officer, Dave Burbage, but are paid through limited companies.
The consultation, which ends on 16th August seeks to gather feedback on proposals that “provision is introduced to ensure that controlling persons have income tax (PAYE) and National Insurance deducted at source by the engaging organisation.”
Once we hear the outcome of that particular consultation, we’ll let you know the results.
In the meantime, we’ve contacted the Isle of Wight council to see whether they have provided any feedback to the consultation and will let you know what the response was.
Image: Tax Brackets under CC BY 2.0
