The WMTPA were contacted by a concerned activist regarding a story in the press about her local chief fire officer who has changed his title in order to take advantage of a loophole and avoid paying tax on his hefty pension payout.
The Daily Mail, where our activist first spotted the story, said:
“Under revenue guidelines any fire officer retiring before the age of 55 should be liable to pay 40% tax on his lump sum.
Mr Hayden has been able to avoid that by changing his job title to ‘brigade manager’ – even though he is still referred to as ‘chief fire officer’ on the service’s website and headed notepaper”.
According to the paper he is only one of ten chief officers across the country taking advantage of this get-out in order to retire early and avoid tax.
What’s more the issue of the early retirement itself is somewhat contentious. Hayden is due to retire on 12th May, his 50th birthday, and in the Kidderminster Shuttle the Fire Brigades Union are saying that he is officially unable to do so without asking the permission of the Fire and Rescue Authority as he is under the age of 55.
Queue bumbling confusion and miscommunication.
The Fire and Rescue authority, however, are now unlikely to disallow Mr. Hayden’s retirement as they’ve already hired his replacement on £122,000pa.
The Shuttle says:
“The fire service’s statutory ranking system changed in 2006 which meant anyone appointed as a chief fire officer after that date held the rank of brigade manager.
Brigade managers under the age of 55 do not have to seek approval from the fire authority before being able to retire.
But Mr Hayden was appointed in 2005, therefore the union argues that he cannot legally retire without the fire authority’s permission until he is 55”.
So if he is a Brigade Manager he may retire without permission and avoid tax on his considerable lump sum, but if he is a chief officer (as seems to be the case) he should be required to pay the 40%, and that’s if his retirement is even legal.
Mr. Hayden knows when to keep his head down and is, apparently, off on annual leave but any (expensive) investigations will have to be carried out by the Audit Commission. There’s even talk of them having two chiefs in the payroll... What a complete mess.
From a taxpayer’s perspective, this is a complete calamity on many levels; what a whopping pay-off and pension (and what a pension for the public to be paying for many, many years – after all, he’s only 50), a fire authority who fail to double-check rules and regulations, Audit Commission investigations, two Chief Officers on payroll, etc etc. And of course, this is happening throughout the country.
When did the grasp on taxpayers’ cash become so flimsy, and how did we get to the stage where servicemen – once revered figures and icons of civic duty – were stooping to the level of ‘title flipping’ in order to line their own pockets with more public cash? Cash that we pay out for frontline fire services.
Indeed, how did this one get smuggled under the noses of the Fire and Rescue Authority, and how did it get to the stage of them hiring a replacement without having granted permission for the retirement of Mr. Hayden? If they were elected and accountable then maybe heads would roll, but they’re a quango and thus allowed to do what they want without consequence.
“Flout the rules and take the cash, after all, it’s no-one’s money” is the attitude and unfortunately it’s now too late. No doubt Mr. Hayden will retire on his birthday, with his generous package (perhaps docked a little in a token gesture to appease people like us) and the whole episode will be buried.
It’s the sad truth that, more and more, this is what we’re coming to expect from those in authority and employed on our funds.