http://www.bbc.co.uk/news/uk-politics-16709780
Turns out the chief exec of the students loan company was given a deal by the government which means he avoids tax. In brief, unlike everyone else at the SLC who are employed by said organisation, and pay tax through the PAYE system, he is paid in gross to his private service company. This means despite being a public sector employee, he doesn't pay NI and income tax like the rest of us, but can save around £40k a year using his service company.
It looks like it was agreed by ministers of the very same government who have talked up austerity, everyone doing their bit, cracking down on tax avoidance etc. The irony is he in charge of making sure students pay back to the public purse what they owe in full.
capitalism is great, the market is perfect, we all would if we could, he has done nothing wrong as it is all legal...think I covered everything there.
remember only little people pay taxes
Sorry, JY, you forgot something: "This job requires the perfect person, if we don't pay this they will leave to go to America etc."
face palms, you are right my mistake 😳
[i] This means despite being a public sector employee,[/i]
But he isn't, he works for himself - and if the employer was happy to agree to this...
Wonder if he's been assessed against IR35?
Student Loans is a staggeringly badly run company too. <Hmm. Weighs up odds of being sued. Decides they are slim> Back when I was working for a bank, I was involved in doing a business pitch for their business. It'd have been a pretty solid contract, but after 6 months of mucking about, finally the bank withdrew entirely from negotiations because, quote, "They couldn't make us enough money to make this **** worthwhile".
And this was in the glory days of banking greed, usually the business banking guys would have fellated a dog if someone paid them a pound.
To be fair it's been a very long time since I've heard Cameron/Osborne/Clegg say "we're all in this together".
So I'm not sure whether the accusation of hypocrisy continually leveled against them is still a fair one.
I think the guys should at least be given credit for dropping the slogan. And there's really no point chastising them for hypocrisy when they have had the decency to mend their ways. IMO
Shall I phone students loans tomorrow and tell them I owe nothing as Clegg will pay it?
Has somebody stolen ernie's login? 😯
Why aracer......because I acknowledge that Cameron/Osborne/Clegg have dropped all pretense that "we're all in this together" ?
Not at all mate.....I'm a very fair minded person and I believe in giving credit where credit is due. I'm that kinda guy.
What's the fuss all about? His company is still going to have to pay tax on income, and he is going to have to pay NI and tax on the salary/dividends he draws from that company.
That is about the day rate that consultancy firms bill the public sector for mediocre project managers.
The fuss is that its a method for avoiding tax. he will pay far less tax this way
Private services being contracted to do a job for a public company.
Not that uncommon across the board really?
No it isn't uncommon. Have you noticed LHS ?
And this story isn't about private services being contracted to do a job for a public company. It's about a review of the tax affairs of top civil servants which has been ordered by the chief secretary to the Treasury.
Which apparently you hadn't noticed, despite presumably clicking on the link ?
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Mob rule eh LHS ? I've never heard BBC's Newsnight described as a mob before.
Perhaps you should inform the chief secretary to the Treasury that a review of the tax affairs of top civil servants isn't necessary, as the situation is quite normal and 'common across the board really' ?
I've never heard BBC's Newsnight described as a mob before
Ahh, the good old "beeb" - the gospel for all things "moderate and fair".
What's the fuss all about?...That is about the day rate that consultancy firms bill the public sector for mediocre project managers.
He's not in substance a contractor or consultant, though. He's an employee and should be treated as such.
Ahh, the good old "beeb" - the gospel for all things "moderate and fair".
So you are aware of the BBC's global reputation LHS ? Well done, you're obviously someone who's well informed.
So anyway, how big was this 'mob' that the BBC managed to muster together ? And why did the chief secretary to the Treasury feel it was necessary to comply with demands of this angry torch-carrying mob?
So you are aware of the BBC's global reputation LHS ?
Oh yes indeed.
Of being "moderate and fair" ? Clever you. Some idiots here in the UK think it's run by unscrupulous extremists. Can you believe that ?
Can you believe that ?
Yes, yes I can.
konabunny - MemberHe's not in substance a contractor or consultant, though. He's an employee and should be treated as such.
Precisely.
Yes, yes I can.
It's unbelievable isn't ? There's the BBC with a global reputation for moderation and fairness, and some idiots here in the UK think it's run by unscrupulous extremists. You can't make that sort of stuff up.
Anyway.....tell me more about this mob which forced the chief secretary to the Treasury to order a review on the tax affairs of top civil servants ? It sounds like an attack on democracy to me.
And I thought I was a troll. What on earth are you lot on about?
konabunny+1
If joe public pulled that stunt then HMRC would launch an IR35 investigation, wonder if they will in this case.
You can't make that sort of stuff up.
You just did.
Perhaps that is HMRC's grand scheme. The treasury saves £88,000 in package costs upfront, then at the end of two years, HMRC IR35's his ass (I see he's getting his pension paid, so clear cut disguised employee), and gets all of that lovely NI/Tax back. Trebles all round.
Unfortunately we will never know.
[i]What's the fuss all about? His company is still going to have to pay tax on income, and he is going to have to pay NI and tax on the salary/dividends he draws from that company.[/i]
The fuss is, because he will pay no where near the same amount - lets say with the right expenses and creative 'drawing' of monies, somewhere well south of 20% (of the gross amount, after VAT - probably on the FRVS too), rather than over 50% (tax and NI).
+1 on IR35. He's an employee, bang to rights
double post
A Treasury spokesman said that Mr Alexander was "not made aware" of the potential tax benefits to Mr Lester when he approved his appointment and salary levels...
It beggars belief that Danny Alexander would not have been aware or made aware of the tax benefits- and it would have been incompetent of him not to question the reason for the arrangement.
Putting aside the politics of the issue though, I'm not really sure whether the arrangement was wrong- it's not permanent employment, but a two year contract.
EDIT: Im sure Penna are savvy enough to vet the contract for ir35 compliance.
Where does it say pension contributions are being paid?
I noticed it on re-reading it:
'They produced figures which showed that Mr Lester's package of salary, bonus, [b]pension contribution[/b], travel expenses - which include a weekly commute from his home in Buckinghamshire to SLC offices in Glasgow - and agency fees would cost £501,000 over the two years with the existing arrangement.'
You can't make that sort of stuff up.You just did.
no ernie is correct there are some fools who think the BBC are not impartial or credible... even the flagship news programmes. I am with you on this though it is so far fetched you would indeed think it was made up,. However some people think it is a poor source of journalism.
Anyway perhaps you would like to discuss the actual issue now rather than the messenger?
I noticed it on re-reading it:'They produced figures which showed that Mr Lester's package of salary, bonus, pension contribution, travel expenses - which include a weekly commute from his home in Buckinghamshire to SLC offices in Glasgow - and agency fees would cost £501,000 over the two years with the existing arrangement.'
Isn't that just referring to the total package cost for the permanent role?
Not sure:
'But if he was moved onto payroll, the total for two years would reach £588,900 because of a finder's fee payable to Penna and tax and National Insurance costs to the SLC.'
But let's not let facts get in the way.
Does seem a bit fishy, but if he's on a fixed term contract and operates outside of IR35 then I don't see what the fuss is about. It's HMRC and the tax laws that should be getting the bashing here.
Anyway perhaps you would like to discuss the actual issue now rather than the messenger?
If you lived outside [s]the UK[/s] England for some time and removed the blinkers you would have a differing opinion, anyway, yes i agree lets not go off topic and detract from the OP.
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It is probably best you go back to discussing the meesenger if that is the best you have to offer.
Why aracer......because I acknowledge that Cameron/Osborne/Clegg have dropped all pretense that "we're all in this together" ?
They might have stopped saying it (due to the level of public scorn) but I don't remembering them standing up and saying...
"No, you were right, you lot are going to suffer from all the austerity and me and my affluent buddies are hardly going to notice, what with our considerable wealth as a cushion"
it's not permanent employment, but a two year contract.
Ach, come on, in the current economic climate and in a flexible labour market, two years is far more security than 90% of employees in the UK have.
LHS - Member..... yes i agree lets not go off topic and detract from the OP.
Brilliant.......you managed to go off topic with your very first post !
Which was :
LHS - MemberPrivate services being contracted to do a job for a public company.
Not that uncommon across the board really?
This news story and the OP's link has nothing at all to do with whether it's common for private services to be contracted to do a job for a public company.
It's concerning the fact that the chief secretary to the Treasury was allegedly unaware of the potential tax benefits to the Student Loans Company's chief executive, and that he had ordered an "urgent review"
The clue is in the headline, written in big bold letters : [i]"Civil servant tax claims: Danny Alexander orders review"[/i], so how you missed that is beyond me - I can only conclude that you deliberately deviated from the topic, I can't imagine that anyone who posts on here struggles that much understanding simple written English. Or are really that easily confused ?
You then compounded the problem by appearing to still be in a confused state/off topic, by posting this picture :
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/p>
The inference is clear - that this is all the result of "mob rule". And yet Danny Alexander's decision came only after a BBC Newsnight report, the issue had not been discussed by the general media and there was no evidence of any "public outrage" over the matter.
Unperturbed you decided to attack the BBC and continue to go [i]"off topic and detract from the OP"[/i], something which you now claim you don't want to do 🙂