Use of Contractors that have used Disguised Remuneration Schemes

Yn disgwyl am adolygiad mewnol gan Her Majesty's Treasury o'u triniaeth o'r cais hwn.

Dear Her Majesty's Treasury,

HMRC have recently revealed that they engaged contractors who used "disguised remuneration" (DR) schemes as recently as November 2019.

Please provide the number of contractors engaged by HMT that are
1) currently using DR schemes
2) have been found to be using DR schemes in previous years
3) the number/name of companies that have supplied contractors using DR schemes

Yours faithfully,

Gary Tinker

FOI Requests, Her Majesty's Treasury

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eCase@hmtreasury.gov.uk on behalf of FOI Requests, Her Majesty's Treasury

Our ref: FOI2020/42887

Dear Mr Tinker,

Thank you for your request for information which we are considering under
the terms of the Freedom of Information Act 2000.

This is to confirm receipt of your request and to let you know that it is
receiving attention. If you have any enquiries regarding your request do
not hesitate to contact us.

Please note: HM Treasury has a dedicated email address for the public to
make Freedom of Information requests: [email address]

Yours sincerely

Information Rights Unit | Correspondence and Information Rights | HM
Treasury, 1 Horse Guards Road, London, SW1A 2HQ [1]www.gov.uk/hm-treasury

Correspondence and Information Rights | HM Treasury, 1 Horse Guards Road,
London, SW1A 2HQ [2]www.gov.uk/hm-treasury

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FOI Requests, Her Majesty's Treasury

1 Atodiad

Dear Mr Tinker

 

Please find attached a letter in response to your Freedom of Information
request.

 

Yours sincerely

 

Information Rights Unit | HM Treasury, 1 Horse Guards Road, London, SW1A
2HQ   [1]www.gov.uk/hm-treasury

 

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Dear FOI Requests,

Thank you for your response and its clarity.

As suggested in your response, I will narrow the timeframe.
Please can you undertake a search of records to find any contractors that have been found to use disguised remuneration schemes from 2016 to present day.

Thank you

Yours sincerely,

Gary Tinker

eCase@hmtreasury.gov.uk on behalf of FOI Requests, Her Majesty's Treasury

Our ref: FOI2020/46506

Dear Mr Tinker,

Thank you for your request for information which we are considering under
the terms of the Freedom of Information Act 2000.

This is to confirm receipt of your request and to let you know that it is
receiving attention. If you have any enquiries regarding your request do
not hesitate to contact us.

Please note: HM Treasury has a dedicated email address for the public to
make Freedom of Information requests: [email address]

Yours sincerely

Information Rights Unit | Correspondence and Information Rights | HM
Treasury, 1 Horse Guards Road, London, SW1A 2HQ [1]www.gov.uk/hm-treasury

Correspondence and Information Rights | HM Treasury, 1 Horse Guards Road,
London, SW1A 2HQ [2]www.gov.uk/hm-treasury

References

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1. http://www.gov.uk/hm-treasury
2. http://www.gov.uk/hm-treasury

FOI Requests, Her Majesty's Treasury

1 Atodiad

Dear Mr Tinker

 

Please find attached a letter in response to your Freedom of Information
request.

 

Yours sincerely

 

Information Rights Unit | HM Treasury, 1 Horse Guards Road, London, SW1A
2HQ   [1]www.gov.uk/hm-treasury

 

 

 

 

This email and any files transmitted with it are intended solely for the
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Dear FOI Requests,

Thank you for the response to my request.

However, I think that you need to check into it a little further before attempting to pass the problem onto HMRC. The law and regulation, some of it written by HMT stipulates that the public organisation should know the status of its contractors.

“Please can you undertake a search of records to find any contractors that have been found to use disguised remuneration schemes from 2016 to present day.”
Or
Confirm that HMT have broken the law by not knowing whether any of its resources are users of such schemes.

A key paragraph in one of the documents referred to below :-
"All government departments and their arm’s length bodies which employ appointees ‘off payroll’ for more than six months have to report to the Treasury about the financial arrangement, to make sure it is transparent and that the appointee in question are paying the right amount of tax and National Insurance."

You may also want to read the response to an FOI raised to HMRC
https://www.whatdotheyknow.com/request/7...
It stated amongst other things the following:-
---------------------------------------------------------------------------------------------------
On 31 January 2012, the Chief Secretary to the Treasury announced a review of the tax arrangements of public sector appointees. The aim of the review was to ascertain the extent of arrangements which could allow public sector appointees to minimise their tax payments, and to make appropriate recommendations.
The review considered the different categories of public sector off-payroll engagements and their associated levels of tax avoidance risk. HM Treasury subsequently introduced a set of rules which required the most senior staff to be on the payroll, unless there are exceptional temporary circumstances. For long-term contractors, employers were required to include contractual provisions to ensure that income tax and National Insurance Contributions (NICs) obligations are being met and allow departments to terminate the contract if assurance is not received when sought.
All government departments and their arm’s length bodies which employ appointees ‘off payroll’ for more than six months have to report to the Treasury about the financial arrangement, to make sure it is transparent and that the appointee in question are paying the right amount of tax and National Insurance. Details of the assurance undertaken by HMRC is available in the department’s Annual Reports and Accounts.
For short-term contractors it is for departments to determine where contractual provisions and assurance were appropriate.
Further details of the assurance undertaken is available in Procurement Policy Note – Tax Arrangements of Public Appointees. Compliance is monitored through an annual review, the results of which were presented to Parliament by the Chief Secretary to the Treasury in a Written Ministerial Statement. Sanctions were considered on a case-by-case basis where a department was found to be in breach of the rules.
----------------------------------------------------------------------------------------------------------

Further to this FOI
You will also find the document
Managing Public Money, published by HMT
https://assets.publishing.service.gov.uk...
----------------------------------------------------------------------------------------------------------

5.6.1 Public sector organisations should not engage in, or connive at, tax evasion, tax avoidance or tax planning. If a public sector organisation were to obtain financial advantage by moderating the tax paid by a contractor, supplier or other counterparty, it would usually mean that the Exchequer as a whole would be worse off – thus conflicting with the accounting officer’s duties (section 3.3). Thus artificial tax avoidance schemes should normally be rejected. It should be standard practice to consult HMRC3 about transactions involving non-standard approaches to tax before going ahead.
----------------------------------------------------------------------------------------------------------
This document also contains a link
---------------------------------------------------------------------------------------------------------
Section A4.6.19
HM Revenue and Customs on tax avoidance issues
(http://www.hmrc.gov.uk/avoidance/)

Yours sincerely,

Gary Tinker

FOI Requests, Her Majesty's Treasury

Dear Mr Tinker

Thank you for your email regarding your request for an internal review.

I can confirm that your review request was received on 23 January and is
receiving attention under our reference IR2021/02613.

There is no statutory deadline for responding to internal review requests.

However, in line with the Information Commissioner’s guidelines and the
2018 FOI Code of Practice, we aim to complete  internal reviews within 20
working days.

Yours sincerely

Information Rights Unit | Correspondence and Information Rights | HM
Treasury, 1 Horse Guards Road, London, SW1A 2HQ  
[1]www.gov.uk/hm-treasury

dangos adrannau a ddyfynnir

Dear FOI Requests,

I note that HMT have changed the state of this FOI into an internal review of the FOI raised
I do not believe I requested an internal review.
I asked for the question to be answered as at this time HMT has not answered the question raised

Yours sincerely,

Gary Tinker

FOI Requests, Her Majesty's Treasury

Dear Mr Tinker

Thank you for your request for information which we are considering under
the terms of the Freedom of Information Act 2000.

This is to confirm receipt of your request and to let you know that it is
receiving attention under reference FOI2021/02845.

Thank you also for your follow up email of 26 January at 10:11am advising
us that you do not wish us to conduct an Internal Review.

If you have any enquiries regarding your request do not hesitate to
contact us.

Please note: HM Treasury has a dedicated email address for the public to
make Freedom of Information requests: [1][email address]

Yours sincerely

Information Rights Unit | Correspondence and Information Rights | HM
Treasury, 1 Horse Guards Road, London, SW1A 2HQ  
[2]www.gov.uk/hm-treasury

dangos adrannau a ddyfynnir

FOI Requests, Her Majesty's Treasury

1 Atodiad

Dear Mr Tinker

 

Please find attached HM Treasury’s response to your information request.

 

Yours sincerely

 

Information Rights Unit | Correspondence and Information Rights Team | HM
Treasury, 1 Horse Guards Road, London, SW1A
2HQ | [1]www.gov.uk/hm-treasury 

 

 

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Dear FOI Requests,

Thank you for your latest response to my FOI, but it does not answer the question.

By law, HMT , as a public sector organisation must ensure that contractors,contingent labour,off-payroll resources are not using tax avoidance schemes. This includes ensuring that the third party agency supplies resources that are compliant with that regulation. I have provided links in my previous request that point out these regulations

I have examined the HMT annual report and can see that there are a significant number of off-payroll engagements. I can also see that HMT have sought assurance from off-payroll resources regarding their tax arrangements in years 2011/12, but it appears that such checks or assurances have not been sought other than to check IR35 status since 2017/18

In that respect, by law, HMT must know the answer to the question.

It is not acceptable (and breaking the law) to say that HMT does not hold this information.
It is the law that HMT must hold this data.

Please provide the requested information.
Namely
The number of contractors engaged by HMT that are
1) currently using DR schemes
2) have been found to be using DR schemes in previous years
3) the number/name of companies that have supplied contractors using DR schemes

Yours sincerely,

Gary Tinker

eCase@hmtreasury.gov.uk on behalf of FOI Requests, Her Majesty's Treasury

Our ref: FOI2021/06725

Dear Mr Tinker,

Thank you for your request for information which we are considering under
the terms of the Freedom of Information Act 2000.

This is to confirm receipt of your request and to let you know that it is
receiving attention. If you have any enquiries regarding your request do
not hesitate to contact us.

Please note: HM Treasury has a dedicated email address for the public to
make Freedom of Information requests: [email address]

Yours sincerely

Information Rights Unit | Correspondence and Information Rights | HM
Treasury, 1 Horse Guards Road, London, SW1A 2HQ [1]www.gov.uk/hm-treasury

Correspondence and Information Rights | HM Treasury, 1 Horse Guards Road,
London, SW1A 2HQ [2]www.gov.uk/hm-treasury

References

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1. http://www.gov.uk/hm-treasury
2. http://www.gov.uk/hm-treasury

Dear [email address] on behalf of FOI Requests,

This request is now very overdue.
Please provide the information requested

Thanks

Yours sincerely,

Gary Tinker

Dear [email address] on behalf of FOI Requests,

Your last response to this FOI was on the 22/2/2021 making a response extremely overdue

Please advise when the request will receive a response.

Yours sincerely,

Gary Tinker

FOI Requests, Her Majesty's Treasury

1 Atodiad

Dear Mr Tinker

 

Please find attached HM Treasury’s response.

 

Yours sincerely

 

Information Rights Unit | Correspondence and Information Rights Team | HM
Treasury, 1 Horse Guards Road, London, SW1A
2HQ | [1]www.gov.uk/hm-treasury 

 

 

This email and any files transmitted with it are intended solely for the
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Dear Her Majesty's Treasury,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of Her Majesty's Treasury's handling of my FOI request 'Use of Contractors that have used Disguised Remuneration Schemes'.

I am confused and do not accept that HMT have responded correctly to this FOI request.

In your response on the 21/12/2020 you stated that
I can confirm that HM Treasury holds some information within the scope of your request.
In your response on the 21/01/2021 you stated that
We can confirm that HM Treasury does not hold information within the scope of your
request.
In this latest response dated 8/6/2021 you have stated
We can confirm that HM Treasury does not hold information within the scope of your
request

So part way through this request HMT decided that it no longer had data in scope. This is quite odd, is it possible to explain?

You stated the following
"HM Treasury uses the pan Government Public Sector Resourcing framework agreement to
source and procure contingent labour. This framework agreement was established in
January 2018. The contractual arrangements that cover this agreement are such that no
contingent labour procured through this route are paid using a disguised remuneration
scheme."

HMRC also use the Government Public Sector Resourcing framework and identified as late as July 2020 that it was using contractors that were using tax avoidance schemes.
The law makes it clear that the public body must ensure that its suppliers and resources have not used avoidance schemes. It is not acceptable to hide behind the argument that only HMRC could know this.

However your department should be congratulated on one level of honesty that exceeds that of HMRC in concluding that don't know means 'don't know', even if that is breaking the law that HMT itself helped formulate. In comparison HMRC stated in 2018 that they did not know how many contractors had used tax avoidance schemes and from not knowing the answer stated the number to be nil. Clearly illogical. However after several further FOI requests they finally told the truth and admitted knowing of at least 13.

Is it a fact then that every other public body other than HMRC is exempt from the law as formulated by HMT in 2012 on the grounds that they cannot know the answer to the question of whether their suppliers or contingent labour has or is using a tax avoidance scheme?

I think that HMT needs to consider sanctions on itself as it has not complied with the law that the Chief Secretary to the Treasury announced on 31/1/2012. Please state why HMT should not report itself.

There also remains a gap between 2016 and 2018 where HMT was engaging contingent labour and suppliers that may have been using tax avoidance schemes. I will ask one last time for HMT to confirm that it did not engage suppliers or contingent labour using tax avoidance schemes post 2016. It is worth pointing out that under section 77 of the FOIA it a criminal offence for a person to do anything with the intention of preventing the disclosure of information pursuant to an FOI request.

A full history of my FOI request and all correspondence is available on the Internet at this address: https://www.whatdotheyknow.com/request/u...

Yours faithfully,

Gary Tinker

FOI Requests, Her Majesty's Treasury

Dear Gary Tinker, 

Thank you for your email regarding your request for an internal review.  

I can confirm that your review request was received on 9 June 2021 and is
receiving attention under our reference IR2021/15977.

There is no statutory deadline for responding to internal review
requests.  

However, in line with the Information Commissioner’s guidelines and the
2018 FOI Code of Practice, we aim to complete  internal reviews within 20
working days.  

Yours sincerely 
 
Information Rights Unit | Correspondence and Information Rights | HM
Treasury, 1 Horse Guards Road, London, SW1A 2HQ  
[1]www.gov.uk/hm-treasury 

This email and any files transmitted with it are intended solely for the
use of the individual(s) to whom they are addressed. If you are not the
intended recipient and have received this email in error, please notify
the sender and delete the email. This footnote also confirms that our
email communications may be monitored to ensure the secure and effective
operation of our systems and for other lawful purposes, and that this
email has been swept for malware and viruses.

References

Visible links
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