NHS foundation trusts still using off-payroll deals

14 July 2014

The Treasury introduced restrictions in 2012 on the use by public sector employers of individuals paid through personal service companies. According to Public Finance, one fifth of NHS foundation trusts have yet to comply with these restrictions.

The introduction of the rules followed media criticism about the way in which personal service companies and similar arrangements can be used to delay, and in some circumstances reduce, payment of the tax which would be payable under normal PAYE procedures.

The restrictions include a requirement that any contractor working with government for more than six months must provide satisfactory assurances on their tax affairs. In addition, senior appointments at board level or with significant financial responsibility must be on the central payroll within six months.

Previous reviews of the operation of these rules have reported failures in some government departments. The latest report from Public Finance indicates continued breaches of the rules in some NHS trusts.