ContractorUK has recently written that “Temporary staff agencies have avoided hundreds of millions (if not billions) in tax”…………..
HOW?
By a scheme that far too many agencies are allowing contractors and temporary workers to register with – THIS HAS TO STOP.
In simplistic terms, the scheme pairs up all the workers, and routes them through a myriad of smaller Limited Companies. Clearly, these are NOT TRUE Limited companies. These mini employment companies are ultimately exploiting both VAT and the National Insurance Employment Allowance. Why would anyone want this spotlight on them? Moreso, they continue to allow workers to operate within such a model. Not only is the worker exposed, the Agency is too.
Whilst Patrick Griffin of Premier Payco, the alleged scheme provider uncovered recently by the Guardian, disagreed, you have to ask questions of his response and the moral compass of his employer – “All I can do is present to you the case that we’re doing is effective, it works and it complies with all of the laws”. He went on to say that the scheme legally helps clients avoid taxes and is based on genuine commercial relationships and reflects tax rules as “they’re currently written”.
HMRC’s stance is clear. Such schemes (and there are more than 600), are under investigation and will be closed down (where appropriate). In addition, an HMRC spokesman has told ContractorUK “HMRC strongly advises anyone who has used such a scheme to withdraw and notify”
Could it be more black and white?
Not in this case – tax avoidance will not, should not, and cannot be tolerated. Whilst a realistic revenue loss no doubt runs into the hundreds of millions, it could feasibly run into the billions (both NI & VAT).
There is no hiding place, and neither should there be. Similarly, within a growing, and ever changing outsourced payroll marketplace, it is more important than ever to engage with a reputable, credible, and compliant provider. With solutions across the breadth of the payroll spectrum ePayMe are well positioned. Speak to one of our experts today on 01252 863700.
Sources,
ContractorUK
HMRC
The Guardian