Anorak News | It’s the Government tax dodging on these 2,000 civil servants

It’s the Government tax dodging on these 2,000 civil servants

by | 3rd, May 2012

MORE than 2,000 senior public sector officials are being paid through private companies rather than the government’s payroll in an attempt to minimise their tax bill, according to a leaked Treasury document.

What horrors, eh? Absolutely disgusting in fact!

The disclosure follows an outcry over the practice which has allowed civil servants to save themselves tens of thousands of pounds a year in tax. The practice has cost the government millions of pounds in lost revenue.

Well, no, you can’t save tens of thousands doing this. Sure, you pay corporation tax at 26% or whatever, not income tax at 45%, at first. But you do then pay income tax minus the corporation tax already paid when you take the money out of the company as dividends. The actual savings on income tax are somewhere between not very much and nothing.

There are savings on national insurance, this is true, buit they can’t be tens of thousands because no one pays that much NI in the first place.

But the real tax dodger here is HMG. Because, if these people were paid as employees then HMG would have to pay employers’ NI on it. As they’re paid into companies they don’t.

So, in reality, it’s HMG that’s the tax dodger here….

Image:┬áSir Gus O’Donnell speaks to media at the UK Passport Office, in London, Thursday September 1, 2005, on his first day as a Cabinet Secretary. He is visiting civil servants across the capital in an attempt to help break down the stereotype of desk-bound Sir Humphrey figures. See PA Story POLITICS O’Donnell. PRESS ASSOCIATION Photo. Photo credit should read: Ian Nicholson/Pool/PA

Posted: 3rd, May 2012 | In: Money Comment | TrackBack | Permalink