Danny in the thick of it again

2 February 2012

Danny Alexander finds himself at the centre of another fiasco, involving tax avoidance by a senior civil servant.

Ed Lester, the head of the Student Loans Company, had been allowed to be paid through a private firm instead of being added to the Student Loans Company payroll, on which he would have had tax and National Insurance payments deducted at source from his £182,000 pay.

Mr Alexander was forced to the House of Commons to make a statement, where he gave an assurance that Ed Lester’s salary would in future be taxed at source.  The chief secretary, who signs off civil service salaries above £142,500, said he was “not aware… of any tax benefit to the individual concerned” when approving the salary level.  He said official guidance says public sector organisations should “avoid using tax advisers and avoidance schemes”.

The media is still investigating who approved the tax deal, while government departments have been put on alert to ensure that they do not support tax avoidance schemes.

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