Following on from last night’s Radio 5 programme into tax avoidance by recruitment agencies (http://www.bbc.co.uk/news/business-19977308), Stuart Davis, Chairman of the FCSA comments: ‘The programme highlights some legitimate concerns about the behaviour of some recruitment agencies and payroll companies. It is clear that a small minority are not operating within the spirit of the law and exploiting low paid workers by not paying National Minimum Wage (NMW), and using expenses as part of NMW to make up the shortfall. We would condemn any organisation which undertakes this practice and we would urge the government to clamp down on them. HMRC has strict rules to ensure vulnerable workers are not exploited in this way. Now, they must implement them. Otherwise, if they allow this exploitation of vulnerable temporary workers to continue, I am certain the Government will bring in legislation to stop tax-free expenses being paid at all. This ‘one size fits all’ approach would have a severe impact on the flexible workforce which legitimately claims expenses. This exploitation reported by the BBC demonstrates once again the importance of having a strict code of conduct, along the lines of the FCSA one, which agencies and end clients can follow when deciding who they do business with. Only then can we stamp out the exploitation of the vulnerable whilst safe-guarding the legitimate expenses payments of a large section of the flexible workforce. REC chief executive Kevin Green said: “This started out as a legitimate HMRC scheme but has morphed into a mess. HMRC must do more to investigate complaints, apply the law and ensure a level playing field for all recruiters. The current lack of enforcement puts recruiters who abide by the rules at a disadvantage and could lead to workers missing out on benefits and the treasury losing out on tax revenue. “Employers also need to make a stand. They are demanding ever cheaper labour and need to change their behaviour. They should look closely at their supply chains and refuse to work with agencies and payroll companies who run schemes that bend the rules.”