FINANCIAL Secretary Sir Hamish Macleod yesterday admitted the Government had used the tax loophole he denounced in last week's Budget, and which he has vowed to close.
Service companies in which the employer-employee relationship is disguised are a means of tax avoidance.
The Government's public affairs adviser John Elliott is among those employed through a service company.
The Financial Secretary described the use of service companies to avoid paying tax as ''clearly wrong'' in his Budget speech, and criticised these as ''shams and artificial arrangements''.
But Sir Hamish denied yesterday it was at all embarrassing for the Government to be found using the arrangements he had denounced, since only ''one or two'' individuals were involved, out of a 170,000-member civil service.
There are reports that six legislators similarly benefited from service companies.
