Senior Civil Servant Tax Bills Being Paid Using Public Money

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July 15th 2020
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Senior Civil Servant Tax Bills Being Paid Using Public Money

HMRC endorsed deal with Whitehall has allowed the tax on benefits in kind to be paid using public funds.

An investigation into taxable perks provided to senior civil servants revealed a 10 year old arrangement between the revenue and governmental departments.

The legal arrangement between HMRC and Whitehall allows the employer to pay the tax usually payable on benefits in kind, or perks.

There are over 3 million benefit in kind claims every year and only 0.5 percent (20,000) have taxes on the perk paid by the employer. Normally, benefits in kind/perks are liable to income tax and this is paid by the employee who receives the benefit. For example, a company car is subject to company car tax.

Whitehall used the arrangement to allow them to increase the pay package of senior civil servants by up to £30,000 without any additional tax burden on the employee. However, the tax due on the £30,000, up to £15,000, was paid using public money.

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