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HMRC defends tax benefits as 'common practice'

HM Revenue and Customs (HMRC) has insisted that the tax benefits enjoyed by top civil servants were past of a scheme that is "quite a common practice by employers".

Responding to the Daily Telegraph's report, the department said:

We can't discuss individual cases. However, cars provided by an employer that are available for employee use are a benefit in kind for the employee and are taxable. These rules have been in place for 37 years.

Employers may choose to pay the tax due on the benefit. If so any such payment will constitute an additional benefit - which will also be taxable on the employee.

This is quite a common practice by employers and is a matter between employer and employee. HMRC makes sure all the tax due is paid.

– HM Revenue and Customs (HMRC)

Tory MP: Whitehall perks out of line with private sector

A senior Conservative MP has criticised the reported tax bill benefits enjoyed by senior civil servants in Whitehall.

Most taxpayers would be surprised to find that this sort of thing is tax-free. These are out of line with what one would expect from the way people in the private sector are treated

Taxpayers are already paying a lot for these people, I don't think they would be expecting to dig into their pocket to pay for the tax on the benefit as well.

– Richard Bacon, Tory member of the Commons Public Accounts Committee

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Report: Public funds used for top civil servants' tax bills

Sir Jeremy Heywood's use of a chauffeur-driven Toyota Prius reportedly cost taxpayers £172,100 over the past two years. Credit: John Stillwell/PA Wire

Some of Britain's top civil servants are enjoying an effective pay boost of up to £30,000 a year by having part of their tax bills paid out of public funds, The Daily Telegraph has reported.

The newspaper said Government departments were paying the taxes on perks such as official cars, first class rail travel and rent-free accommodation.

HM Revenue and Customs (HMRC) said the rules have been in place since the 1970s and insisted taxpayers do not lose out.

The report said those benefiting from the system included the Cabinet Secretary, Sir Jeremy Heywood, the head of NHS England, Sir David Nicholson, and the former head of the Serious Fraud Office, Phillippa Williamson.

Under-performing civil servants may face dismissal

Plans to shake up the way government departments in Whitehall are run could mean that under-performing civil servants lose their jobs.

According to The Independent Ministers are planning to extend performance-related pay. That could see some staff taking a 10 per cent pay cut if they under-perform.

Minister for the Cabinet Office Francis Maude Credit: Press Association