A report in the Telegraph on the 14th July 2014…
Dozens of NHS executives face possible investigation by HM Revenue and Customs after they refused to answer questions about their tax arrangements, it can be revealed.
An investigation has identified 86 senior health service officials paid off-payroll who have refused to give assurances to their employers that they are paying the correct level of income tax and national insurance.
They are paid through service companies – arrangements that allow public sector employees to be paid as contractors through private companies, potentially cutting their tax bills.
Monitor found 30 foundation trusts had issues to resolve in their report of the 10th July 2014:
- 20 foundation trusts have 1 or more senior employees paid through an off-payroll arrangement, and they are waiting for responses after asking those employees for assurance about their tax arrangements
- 23 foundation trusts (including some of the 20 above) still have at least 1 board member or senior member of staff with significant financial responsibility employed through an off-payroll arrangement
- of these 23 trusts, 9 are facing wider issues relating to their performance which they have explained is affecting their ability to recruit and retain permanent skilled staff; this resulted in the need to use interim off-payroll contracts to attract high-performing staff to help improve the foundation trust’s situation
- as a result of their performance issues, these 9 trusts are facing current enforcement action by Monitor, which is unrelated to their use of off-payroll employment
- out of those 23 trusts, the other 14 which are not facing enforcement action have plans to end off-payroll arrangements by the end of the year
Will this end the use of PSC’s in the NHS?
steve@bicknells.net
Another big problem in the NHS is senior consultants who are employed, that notch up long service and unwittingly breach the (now reduced) Lifetime Allowance for pension accrual resulting in a tax charge of 55% on the excess over £1.25 million – this equates to a pension of £62,500 p.a. In addition promotions that bring a decent pay rise can also breach the £40,000 annual limit as a factor of 16 x is used. The NHS pension scheme doesn’t warn in advance, it tells youafter you have incurred the tax bill!