MPs have criticised the tax arrangements of some public sector workers.
The cross-party Public Accounts Committee said it was “shocked” to discover how many off-payroll contracts, under which individuals must make their own tax and national insurance payments, were provided by public sector organisations, including the NHS.
In June, HSJ revealed how at the start of the year the NHS paid 48 off-payroll executives daily rates totalling £44,000.
Labour MP and PAC chairwoman Margaret Hodge warned that the use of off-payroll arrangements gave rise to “suspicions of complicity in tax avoidance”.
Ms Hodge said the committee suspected “many individuals and employers in local government and in the health service do not pay their proper tax and national insurance contributions”.
“The public sector must itself maintain the highest standards of propriety in its employment practices if it is to show leadership in the fight against tax avoidance,” she said.
“It must avoid the practice of using off-payroll arrangements for staff who should be on the payroll - a practice which generates suspicions of complicity in tax avoidance and which fails to meet the standards expected of public officials.
“Those whose income is derived from monies raised through taxation have a particular obligation to make sure that they do not use tax avoidance schemes.”
The concerns were raised after an inquiry was set up by the PAC following the emergence that Student Loans Company boss Ed Lester was employed through a personal service company without tax being deducted at source.
The Treasury conducted its own review of the practice in Whitehall and disclosed in May that more than 2,400 staff, each earning more than £58,200 a year, were being paid directly and without PAYE deductions.
But the PAC warned that the Treasury’s review of off-payroll arrangements had been “limited” because it did not cover the wider public sector like the NHS, local government or the BBC.
The BBC employs 25,000 people a year who do not pay tax at source, including 13,000 people who appear on television and radio - so-called on-air “talent” - and another 12,000 off-air staff, the PAC said.