Lamont urged to close tax loophole

A LABOUR member of the Treasury select committee, the Inland Revenue watchdog, yesterday tabled a Commons question critical of John Birt's tax-avoiding steps, writes Patricia Wynn Davies.

Brian Sedgemore, Labour MP for Hackney South & Shoreditch, urged Norman Lamont to close the tax loophole, asking whether he had 'any plans to clarify the definition of 'employee' in relation to PAYE in connection with the payment of fees through private companies in lieu of salary'.

Mr Sedgemore said: 'John Birt heads an organisation which receives pounds 1bn a year from the licence fee, which is basically a tax. Clearly he cannot go on arguing for the retention of the licence fee if he is not going to pay his share.' He added: 'It is impossible to see how Mr Birt is classified as self-employed when manifestly he is an employee.'