Here\’s where the earlier denial that anyone got paid through a services company went off the rails:
She said: \”We can confirm that no civil servant who is an employee of the Department of Health is paid in this way. To this extent it was certainly not our intention to mislead anyone involved.
Well of course not. For if they\’re paid through a services company then they\’re not an employee, are they? They\’re a contractor.
And they\’re still not getting the tax implications either.
The arrangements would enable those involved to save thousands of pounds a year in income tax and National Insurance contributions because they would be taxed at the corporation tax rate of 21 per cent.
That\’s only stage one. When they pay themselves out of the company they either pay income tax and NI just as normal or they take it out as dividends and end up paying income tax just as normal. It\’s national insurance that this arrangement helps with, not income tax as such.