Westminster at war: How Whitehall civil servants ‘used public money to pay tax bills’


    Prime Minister Boris Johnson’s top aide Dominic Cummings is said to be forcing advisors to read books promoting superforecasting and paranoia as part of a rigorous training regime he arranged for the summer. Special advisors were told to read the 350-page book “Superforecasting: The Art and Science of Prediction” by Philip Tetlocks and “High Output Management” by Andrew Grove which claims that “only the paranoid survive”. According to POLITICO, the strict regime includes weekend away days during the summer break, where advisors are expected to discuss roadblocks preventing the progress of Government policies.

    It comes as No 10 has come under fire for its decision to fill Sir Mark’s other role as national security advisor with David Frost, who is expected to prioritise his role negotiating the UK’s deal with the EU while learning his new job.

    The move is widely seen as just the beginning of wider upheaval, though, which has long been championed by Mr Cummings.

    As the Westminster revolution appears to be under way, unearthed reports reveal how Whitehall departments sparked outrage in 2013, as it emerged they were subsidising the taxes on benefits such as official cars, first class rail travel and rent-free accommodation.

    According to a throwback report by The Telegraph, the arrangements, which were described by tax advisers as “highly unusual”, were made between Government departments and the taxman as part of a deal agreed more than a decade ago.

    The effect of the deal was to increase the value of officials’ pay packages by up to £30,000 a year at the expense of taxpayers.

    Those who benefited from the scheme included Sir Jeremy Heywood, the former Cabinet Secretary; Sir David Nicholson, the former head of NHS England; and Phillippa Williamson, the former head of the Serious Fraud Office.

    Richard Bacon, a former Conservative member of the public accounts committee, expressed shock at the arrangements, saying he was “concerned” that officials were being given tax-free benefits while members of the public had to pay the taxman for theirs.

    In the private sector, the cost of tax on benefits is usually met by the employee, not the employer.

    Mr Bacon said: “Most taxpayers would be surprised to find that this sort of thing is tax-free.

    “These are out of line with what one would expect from the way people in the private sector are treated.

    “Taxpayers are already paying a lot for these people, I don’t think they would be expecting to dig into their pocket to pay for the tax on the benefit as well.”

    Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants, described such arrangements as “very rare”.

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    He added: “Sometimes private sector employers will pay the tax for senior staff working in hostile environments where they need protection.

    “Some companies also do this for their chief executives, but this is certainly not common.”

    Sir Jeremy, who was paid £185,000, enjoyed use of a chauffeur-driven Toyota Prius as Britain’s most senior civil servant.

    He used the car to travel between Westminster and his town house in Clapham, south London, and for official business.

    According to Cabinet Office accounts, the vehicle, including chauffeur, cost taxpayers £172,100 in 2011 and 2012.

    The figure included the tax bill for the benefit, which would have been an estimated £49,243.

    Sir Jeremy had a leading role in the austerity programme sweeping through Westminster and Whitehall, which led to hundreds of thousands of public sector workers losing their jobs.

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    A spokesman for the Cabinet Office declined to say how frequently Sir Jeremy made use of the car, but said that he shared it with Sir Bob Kerslake, the former head of the Civil Service and other officials.

    She added: “We are following established HMRC procedure, which has been in place for many years.”

    HMRC also insisted that the arrangements were above board.

    It said in a statement: “We can’t discuss individual cases. However, cars provided by an employer that are available for employee use are a benefit in kind for the employee and are taxable. These rules have been in place for 37 years.

    “Employers may choose to pay the tax due on the benefit. If so any such payment will constitute an additional benefit – which will also be taxable on the employee.

    “This is quite a common practice by employers and is a matter between employer and employee. HMRC makes sure all the tax due is paid.”


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