Downing Street has defended Liz Truss’s new chief of staff following the revelation that he is being paid through his lobbying firm rather than as a straight Government employee.
No10 stated that Mark Fullbrook was “on secondment” from Fullbrook Strategies and that the arrangement for his salary to be paid to the firm established in April had been approved.
Typically, special advisers are compensated like workers, and their salaries are subject to income tax. Boris Johnson’s predecessor as chief of staff, Mr. Fullbrook, was paid £140,000.
However, if he gets paid through his company, he could be classified as an independent contractor, which could reduce his tax liability.
In addition, he could benefit from the adjustments to tax accounting for contract workers that Kwasi Kwarteng announced in his mini-Budget on Friday.
As part of a package of steps to streamline the tax system, controversial changes to IR35 accounting standards will be repealed.
Mr. Fullbrook’s representative denied last night that the arrangement was made to decrease his tax liability, telling the Sunday Times, ‘This is not an unusual arrangement.’ It was not established for tax purposes, and Mr. Fullbrook receives no tax advantage from it.
This morning, a spokesperson for No10 stated, ‘All government personnel are subject to the requisite checks and vetting, and all special advisers declare their interests in accordance with Cabinet Office guidelines.
It is not uncommon for a special adviser or civil worker to be seconded to the government.
No10 stated that Mark Fullbrook was “on secondment” from Fullbrook Strategies and that the arrangement for his salary to be paid to the firm established in April had been approved.
Typically, special advisers are compensated like workers, and their salaries are subject to income tax. Boris Johnson’s predecessor as chief of staff, Mr. Fullbrook, was paid £140,000.
Any government employee employed on a secondment is subject to the standard special adviser or civil service codes.
“The government will pay the salary of a seconded employee, including expenses such as Employers National Insurance contributions, to the seconding employer.” The Proprietary and Ethics team at Cabinet Office has approved this.”
Today, Chancellor Kwasi Kwarteng referred to Mr. Fullbrook as a “wonderful professional” but stated that he was unaware of his remuneration arrangements.
Mr. Fullbrook has already made news since assuming the No. 10 position two weeks ago.
The FBI has interviewed him in connection with an alleged scheme to bribe an American legislator and influence an election, it was revealed last week.
A US Department of Justice (DoJ) and FBI investigation involving a London-based businessman accused of bribing a US lawmaker has interviewed him as a witness.
Federal officials reached out to their counterparts at the UK’s National Crime Agency and Scotland Yard in order to schedule an interview with the 60-year-old advisor, who previously worked with Brexit-winning Australian election strategist Sir Lynton Crosby.
According to the Sunday Times, Fullbrook, who is married to former Conservative MP Lorraine Fullbrook, has been cooperating with the FBI as a witness and has recruited a leading US legal firm.
Fullbrook rejects vehemently any misconduct.
IR35 was introduced in 1999 to prevent freelancers from working for a firm or local government as a full-time employee without paying the additional taxes this entails.
Initially, individuals were responsible for determining whether they were self-employed or employees for tax purposes.
However, reforms in 2017 and the previous year imposed a strain on the organizations who use these contractors.
It comes after a slew of BBC stars were found to have claimed cheaper tax bills by being paid as freelancers through firms they created, despite the fact that they were effectively employees.
Some criticized the amendments, stating that the changes could be detrimental to the self-employed and freelancers.
Mr. Kwarteng stated that the amendments caused “unnecessary complication and cost for many firms” and pledged to roll back the adjustments in April.
The decision will “simplify things for businesses” and “open up the labor market,” according to Karen Campbell-Williams, the head of tax at accounting firm Grant Thornton.
Around the next five years, Tom Evennett, head of private client at EY, predicts that the measure would cost the taxpayer over £6 billion.
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