The pay arrangement for Liz Truss’ chief of staff, which had him paid as a contractor through his lobbying firm, has been reversed by Downing Street.
Days after defending the system that treated him as being on “secondment” from Fullbrook Strategies, No. 10 announced that Mark Fullbrook would now work directly for Liz Truss’s administration.
Special advisers are frequently paid directly as employees, and their wages are subject to income tax. The person who succeeded Mr. Fullbrook as Boris Johnson’s chief of staff received £140,000.
But getting paid through his company might enable him to pay less in taxes. He denied doing this when he set up the system.
According to a spokesperson for No. 10, Mark Fullbrook will be hired directly by the government on a special adviser contract, despite the fact that there are established procedures for employees to join the government on secondment.
“All government employees, including those joining on secondment, are subject to the necessary checks and vetting, and all special advisers declare their interests in accordance with Cabinet Office guidance,” reads a statement from the government.
Mr. Fullbrook could also benefit from modifications to tax accounting for contractors under the contractor arrangement, which Kwasi Kwarteng unveiled in his mini-Budget on Friday.
As part of a package of reforms to the tax code, controversial changes to the IR35 accounting rules will be abandoned.
The Cabinet Office previously stated that a special adviser joining the government “on secondment” was “not unusual” and that his salary was paid to a “seconding company.”
But opposition parties accused the arrangement of fresh “Tory sleaze.”
Mr. Fullbrook’s spokesman previously refuted rumors that the arrangement allows him to pay less tax.
This is not an unusual arrangement, the spokesman said. Mr. Fullbrook does not receive any tax benefits from it because it was not implemented for tax purposes.
“This U-turn raises more questions than it does answers, especially about Liz Truss’ judgment,” said Liberal Democrat Chief Whip Wendy Chamberlain.
Why did Number 10 defend this appointment for days before retracting when it was questioned?
According to The Sunday Times, Mr. Fullbrook’s business—which he claims has since ceased all business operations—contacted the government on behalf of customers including the Libyan House of Representatives, an energy company, and a PPE company.
Since taking office as the most senior political appointment in the administration two weeks ago, Mr. Fullbrook has already made headlines.
He was questioned as a witness in a Federal Bureau of Investigation (FBI) investigation into suspected bribery in Puerto Rico, it was revealed last week.
The FBI is looking into claims that investor and Tory supporter Julio Herrera Velutini promised to aid the former governor of Puerto Rico in winning reelection if she fired a person who was looking into a bank he owned there.
The accusations made against him have been refuted.
300,000 US dollars (almost £263,000) is what Mr. Velutini is alleged to have paid CT Group, a political consulting firm where Mr. Fullbrook held a senior position, for services meant to aid Wanda Vazquez Garced’s ultimately unsuccessful reelection campaign in 2020.
According to a prior statement from a Downing Street representative, Ms. Truss was completely behind Mr. Fullbrook and gave him her entire support.