Recruitment agencies were warned of the risks in dealing with TAX avoidance schemes operated by some payroll companies at a hard-hitting London-based seminar on the 14th November 2012. It was highlighted that HMRC are increasingly examining the details of these arrangements in an attempt to recover unpaid National Insurance Contributions & TAX from the Agency, End Client or Contractor. Theresa Mimnagh, an Associate Director at Lawspeed, discussed the potential for debt to be transferred to an agency when she said: “All Payroll & Umbrella companies say that they are compliant with HMRC rules yet some are not, and it is easy for agencies to become unwittingly involved thereby exposing themselves to risk under HMRC’s crackdown.” As if any further clarification was required, Shawn Healy, a TAX Director of the international accountants BDO, commented: “The days of a laid back approach to TAX schemes are over for the recruitment industry. It is more important than ever for agencies to ensure that they get the right advice when looking at any arrangement that results in higher net pay for workers. There are some perfectly legal arrangements, but there are others that can leave agencies and hirers exposed to risk of HMRC investigations, and that risk is becoming more real every day as HMRC ramps up its use of existing legislation to close the TAX gap”.