NHS fat cats make up to £2,000 per day in cosy tax deals

The Mail’s campaign has exposed that off-payroll contracts are clearly being abused both at management level and in the hiring of agency staff. So we will stop this abuse as a priority if we form the next government

Health Secretary Jeremy Hunt

NHS chiefs are using a potential tax dodge by channelling salaries of up to £2,000 a day through personal companies.

Hospital bosses are exploiting cashstrapped trusts by raking in bumper pay deals as freelance consultants.

And some are putting that inflated pay through personal service companies – which allows them to avoid paying income tax at source.

Treasury rules state senior staff must always be on the payroll apart from in ‘exceptional temporary circumstances’ lasting no more than six months.

But three hospitals admitted they did not take on tax responsibilities – or pay National Insurance – for ‘interim’ executives they had employed.

This means they have paid them vast sums in public funds while having no control over whether they are paying the correct tax rates.

The unconventional pay arrangements represent a cosy deal between the NHS Trusts and the wealthy bosses.

While the bosses are able to demand huge taxpayer-funded daily rates, the Trusts are able to fill positions at short notice.

The revelations provoked a major political reaction last night. Health Secretary Jeremy Hunt promised an immediate crackdown if his party is in power after the election.

He said: ‘ The Mail’s campaign has exposed that off-payroll contracts are clearly being abused both at a management level and in the hiring of agency staff. So we will stop the abuse as a priority if we form the next government.’

Labour health spokesman Andy Burnham said a Labour government would ‘claw back’ the extraordinary pay rises revealed by the Mail.

Margaret Hodge, who was chairman of the Commons public accounts committee, said taking payment through personal service companies is ‘a way of avoiding tax’.

Yesterday the Mail told how bosses had taken a £35million pay rise amid the worst NHS crisis in a generation.

After the most comprehensive ever analysis of NHS trust pay packages, the Mail revealed how hospital bosses gave themselves the 6 per cent pay boost last year –

‘Desperate to fill positions’

while nurses had pay frozen, patients endured spiralling waiting times and NHS trusts announced record financial losses.

Today the Mail reveals the huge sums spent on temporary hospital bosses, who can rake in daily rates of up to £2,300.

There has been a huge increase in hospitals employing ‘interim’ directors as NHS trust bosses on short-term contracts when hospitals are desperate to fill positions.

Last year the number of interim hospital executives who earned £1,000 a day or more almost doubled, to 44 from 24 in the previous year. The ten NHS interim bosses with the highest salaries were all employed off payroll. Three were in the positions for more than six months.

More worryingly, some were found to have been paid through personal firms, a known tax avoidance tactic.

Peter Reading was paid £405,000 as the interim chief executive of Peterborough and Stamford Hospitals NHS Foundation Trust last year. He claimed a daily rate which works out at £2,109.

Another interim executive, Krystyna Ruszkiewicz, was paid £25,000 for twoand-a-half months’ work at Royal United Hospitals Bath NHS Foundation Trust.

Their fees were channelled through their own companies. There is no suggestion that the executives have not paid any tax due through their service company arrangements.

Peterborough and Stamford Hospitals NHS Foundation Trust said Mr Reading was appointed ‘at a time of particular turbulence for the trust’.