NHS cracks down on tax avoidance

Senior NHS executives have been told to stop paying interim senior staff off-payroll, according to a letter leaked to the Health Service Journal (HSJ).

The letter, written by NHS chief executive Sir David Nicholson, says that in exceptional circumstances off-payroll payments may be used but for a maximum of six months only.

It states that if a temporary worker earning more than £220 a day is off the NHS payroll for more than six months, they will need to provide assurances that they pay income tax and National Insurance.

Trusts should “terminate the contract if the assurance is not provided”, the HSJ reports.

The letter says: “The requirement is aimed at preventing avoidance of payment of income tax and National Insurance contributions.

“If it emerges that any departments have not abided by these rules, sanctions will apply – with departmental resource budgets reduced by up to five times the payment in question.”

Earlier this year it emerged some BBC stars were able to reduce their tax bills by being paid through companies.