Government under fire over latest tax avoidance scheme

3 February 2012

The Government has been heavily criticised after it was revealed that the Student Loans Company CEO was being paid via an agreed tax avoidance scheme, just weeks after Exchequer Secretary to the Treasury, David Gauke, announced that tackling tax avoidance was a top priority.

The investigation uncovered that Ed Lester was using a tax avoidance scheme, which channelled pay directly into his own private company. The arranged deal, that was signed off by senior ministers, meant that Lester's six-figure salary was being paid into his business with little tax and insurance deductions.

Danny Alexander, Chief Secretary to the Treasury, personally came under fire yesterday in the House of Commons and pledged a review across all departments as to who is being paid through tax avoidance schemes and why.

He has now ordered that Ed Lester pay tax and insurance at source and that all other departments with employees under similar tax avoidance schemes must do the same.

Danny Alexander said: "At a time when we all have to pull in the same direction to tackle the country's financial problems, it is essential that we all pay our full and fair share.

That is why I have taken this action to make sure Government departments do not support tax avoidance schemes."