HMRC star Moira in tax furore

The BBC newsreader, Moria Stuart who fronts the Self Assessment advertising campaign with the catchphrase "tax doesn't have to be taxing", has attracted media attention for channelling her fees through a personal services company.

Stuart set up the firm Moira Stuart Limited that entitled her to pay corporation tax at the small companies rate of 21% on some of her earnings.  Companies House filings reveal she is sole director and shareholder of the company.  The accounts show that £22,607 was paid into the company in 2010-11, and after £1,749 of administrative expenses, she paid £4,380 in corporation tax on the profit.

The arrangement is legitimate for freelancers, but HM Revenue & Customs can take action against people who it judges to be "disguised employees".  A spokesman for HMRC said that since Stuart works specifically on advertising campaigns for HMRC and was not employed directly, there was no question of disguised employment.

Foreign secretary William Hague was the first senior cabinet minister to condemn the practice of setting up companies through which to siphon salaries.  Speaking on the Andrew Marr show, Hague said “I’m not very fond of that sort of behaviour.  Sometimes people will have agreed their own arrangements and done it over a long time, and that’s their contractual arrangement, so of course they will have their legal rights to do that.  But, particularly at this time in the nation’s history, people should be paying their taxes fully.”

The increased trend of using service companies across the public sector is coming under growing scrutiny after a series of high profile cases. 

The Treasury is undertaking a wider review across government departments, after the head of the Student Loans Company, Ed Lester was found to have been paid through a service company, reportedly allowing him to legally save as much as £40,000 a year in tax.

The Department of Health is also investigating a claim that up to 25 full-time NHS staff, some on contracts as long as five years, are paid through companies owned by their families.  If the contracts are found to be disguised employment, the staff in question could face being subject to an IR35 investigation by HMRC.

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