The Chief Secretary to the Treasury (Danny Alexander)
In March 2014, I published the results of the first evaluation of tax arrangements for off-payroll contracts in the public sector following the introduction of tighter rules in May 2012 when I published “The Review of the tax arrangements of public sector appointees”.
For senior management where the tax arrangements of individuals should not be open to question, the May 2012 review specified that, regardless of their tax arrangements, board-level officials and those with significant financial responsibility should be on the payroll of the Department or other employing body. This is unless there are exceptional circumstances, and such exceptions should not exist for longer than six months.
Two Departments, the Department for Environment and Rural Affairs and the Department for Transport, each received a fine for failing to ensure that senior appointments are on-payroll within six months of appointment.
I am continuing to monitor compliance with these rules and have recently identified a breach at the Land Registry, where a senior Land Registry board member was engaged off-payroll for longer than six months. As a result, a fine of £1,030,176, the largest for an off-payroll breach so far, has been imposed on the Land Registry for breaking these rules.
I have also written to the Secretary of State for Business, Innovation and Skills, as the parent Department for the Land Registry, asking him to set out the action he will take to hold the Land Registry to account.
While the vast majority of off-payroll contracts are in place for legitimate reasons, I am committed to ensuring that the public sector demonstrates the highest standards in this area. I will continue to monitor compliance to ensure this is the case.