CAMPAIGNERS say "serious questions must be asked" after it emerged the temporary boss of the new North East Combined Authority (NECA) was being paid through a limited company.

Adam Wilkinson said it was a requirement of his employment agency that he was paid for his three-days-a-week role at NECA through a company.

However, the Taxpayers' Alliance said questions must be asked about the arrangement.

Jonathan Isaby, Taxpayers' Alliance chief executive, said: "Our tax code is so complicated that there are simply too many loopholes.

"Serious questions must be asked of whether this arrangement is appropriate considering he is being paid taxpayers' money. The Government promised to put a stop to this practice and it must redouble efforts to do so."

Details of the arrangement have emerged just days after the Chancellor pledged to crack down on the self-employed setting up personal services companies to avoid tax in last week's Budget.

The practice is often used by the self-employed so they can pay corporation tax at 20 per cent, instead of income tax and national insurance.

Richard Murphy, director of Tax Research LLP, added: “The Government has made it clear that employments disguised as contracts through personal service companies are unacceptable tax planning and has said it will crack down on them in the Budget."

It emerged last month that Mr Wilkinson would cost NECA £112,000 for his nine-month contract as interim head of paid service.

Mr Wilkinson said in response to criticism of the arrangements: “I am required by the agency through which I am employed to have a limited company.”

NECA declined to comment, instead referring The Northern Echo to a previous statement issued by chair Cllr Simon Henig when Mr Wilkinson was appointed,

In January, before being hired by NECA, Mr Wilkinson took voluntary redundancy from his role as chief executive of Derby City Council. He was given £140,000 compensation and three months pay.

In 2008, he received £365,000 from Kent County Council where he had been working as director of environment and regeneration. He had been in that position for just a year.