NHS bosses have been ordered to pay temporary managers through the appropriate channels to tackle possible tax avoidance.
Senior NHS executives have been told to stop paying interim senior staff off-payroll, according to a letter leaked to the Health Service Journal (HSJ).
The letter, written by NHS chief executive Sir David Nicholson, says that in exceptional circumstances off-payroll payments may be used but only for a maximum of six months.
It states that if a temporary worker earning more than £220 a day is off the NHS payroll for more than six months, they will need to provide assurances that they pay income tax and National Insurance.
Trusts should "terminate the contract if the assurance is not provided", the HSJ reports.
The letter says: "The requirement is aimed at preventing avoidance of payment of income tax and National Insurance contributions.
"If it emerges that any departments have not abided by these rules, sanctions will apply - with departmental resource budgets reduced by up to five times the payment in question."
