How can a company go bust owing £58 million in tax?


By Richard Murphy, founder of the Tax Justice Network

Tax avoidanceThe Scotsman has reported:

“A TEMPORARY employment agency has gone into liquidation owing HM Revenue & Customs (HMRC) £58 million in unpaid tax.

“Edinburgh-based Employ-E, a division of Legitas Group which is also in liquidation, is owned by lawyer David Allen, who is reported to own a golf course and mansion house in the Borders.

“Employ-E had about 60,000 low-paid temporary workers on its books, who it supplied to recruitment agencies throughout the UK.”

The real question here is, how could that have happened? How could HMRC have reached the point where it cannot chase that much tax? How limited are resources is this is the case?

There is also another question, which is, of course, where is the money? An agency should have been reimbursed all costs including tax. How could it lose that much money?

In the case of both questions surely HMRC should have been on top of this? If not I can only put it down to under-resourcing.

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  • Alec

    You are an idiot. A truly ignorant idiot who cannot admit to a single error (and this was a whopper of a misreading) so continues compounding it in the hope everyone gives up in frustration.

  • LB

    Meanwhile if you do a 45 hour week on a living wage, the state rakes in 5,289.35 in employment taxes from you.

    And you’re worried about someone making a profit from helping people take home more money.

    You’re angry because 15,000 people have managed to pay less tax.

    You’ve a very distorted and disturbing view of the world.

    As a guess, you’re dependent on the poor being taxed to buggery for a living, and the idea that the poor end up paying less tax you find threatening.

    After all, no tax, you’re joining them in being poor.

  • LB

    Still struggling eh?

    Not one factually argument, so you resort to abuse.

    Typical reaction when the left is found out. The right just tend to shut their mouths when they have been rumbled.

  • Alec

    Now the lazy recourse to accusations of abusive lefties… you’re the one [claiming to] defending the welfare state and pensions. You are not very bright, are you?
    ~alec

  • LB

    It’s more money.

    Now, I’m in favour of them getting the 67 quid as well.

    However you are arguing that this person should be stopped from offering a service that helps people get round the mad cap world of taxation.

    You keep persisting in personal attacks because I’m in favour of the poor getting more.

    eg. What about the 5K plus that the state takes from those who just earn a living wage? That puts them into poverty.

    Not a comment. Nope, you’re too worried that they might be claiming back cash that they shouldn’t be paying tax on in the first place.

    So I bet your a ‘public servant’ and you’ve got to get the poor paying thousands of pounds, or you will be out of a job, out of a pensions, and trying to get a job stacking shelves.

    The state is making people poor. It’s the biggest contributor to poverty.

    1. By taxing the poor 5K a year – numbers given, go check
    2. By taking their pension contributions and spending them. End result, a piss poor pension compared to what they would have got by investing.
    475K a year lost for a 26K a year worker – median wage.

    Ah, yes, but you demand their money to make a living.

  • Alec

    It’s more money.

    You might think others here are dim enough to be taken in by this sophistry, but they’re not. We find it pathetic.

    Now, I’m in favour of them getting the 67 quid as well.

    Except that’s not what you’ve been saying. You’ve been explicitly arguing against those who said they should.
    I’m not sure if this is conscious lying or if you are genuinely incapable of cottoning-on to how others see you, like a right-mindest sailing serenely on.
    You seem pathologically incapable of being straight about your own argument. There isn’t much point in taking anything you have to say seriously, is there?
    ~alec

  • Alec

    You’re angry because 15,000 people have managed to pay less tax.

    This isn’t even a questionable interpretation of my comments. It’s something you’ve completely made-up. You are a liar.

    This conversation is over.

    ~alec

  • LB

    5K a year, going to fund your salary and pension, and not the needs of the poor.

    Not taxing the poor is the biggest thing that can be done to make the better off.

    The next one is to allow them to invest their NI and not have it spent on Civil servants and the Philpotts of this world.

    By investing that money they get far more, nearly 5 times as much money when they retire.

    However, you would probably be looking for a job. Without the poor to fund your life style you would be stuffed.

    You complain about someone setting up a company so people can get their money back from you. However, look at the state. Take the DWP.

    5% of the money they adminster goes in costs. You can check their accounts since you don’t believe anything that threatens your livelyhood.

    Given the thousands handed over in NI, those people on living wages are paying huge amounts in hidden fees. Your salary I presume.

  • Alec

    I told you this conversation is over. There is no way you can be trusted when you take my comments here and present them as anger that the 15,000 workers are paying less tax… you’re a fucking liar.

    You think that word’s howwid? So the fuck what? Manners maketh the man, and you have none.

    ~alec

  • LB

    Still not arguing with facts, resorting to ranting and raving.

    Ho hum.

    They are paying less tax. They are paying less tax because they were paying tax on gross income, not on income after expenses have been deducted.

    No doubt you object to the little people doing what MPs and the rich have been doing for a long time.

    Here we’ve a great example of what happens when people get together to take on the state. They’ve grouped together, and they are paying less tax as a result.

    Very difficult for the state. It agrees one of the workers expenses, so all can now claim. With the group, they all do. If the state doesn’t like it, it has a problem HMRC cannot appeal their own judgements, so they have to change the law.

    It’s going to happen more and more.

    What you will also get is other companies getting on the band wagon. Telling their employees how to claim, and making it easy for them to do so.

    It’s the cooperative of people getting involved in dealing with people taking money from them. With 15,000 workers, even by contributing a small about, its very hard for the HMRC to take them on. They can now afford serious lawyers. The HMRC may well view, here’s a lot of money we can steal back to pay our wages, or it can think, ah, if we lose, them lots more will get in on the act.

    The game’s changed. It’s not employer/employee any more. It’s citizen versus the state, and the state is trying to screw people.

  • Alec

    Wa-wa-wa. You are a nasty, spiteful, unpleasant, dishonest little man who has derailed another thread he is not in control of. But, above all, you are thick as pig dribble.

    I wish you’d evaporate.

    ~alec

  • LB

    But its ok for you and your pals in government to fleece people of hundreds of thousands of pounds, but your objecting to the little guy cutting his tax bill by a few quid.

    Not surprised you’re tirading.

  • Alec

    My pals? You absolute weirdo and paranoid delusional loonie.

    ~alec

  • LB

    Still ranting and raving..

    Take the Philpots. They have been receiving money. Its come from other people’s pockets. Mainly at the expense of other people’s pensions. Since the poor have been forced to rely on the state, because they have so little left over after being taxed on their work, it affects them disproportionately.

    So how much was Philpot taking for himself and his brood.

    26K in direct welfare.
    Then housing benefit on top.
    Free council tax
    Free schooling for each child, at 6K a year per child
    On top you’ve got free health care, paid for by others, at 2K a year each.
    That’s without the free police, free fire brigade, and all the other common goods, paid for by others.

    This has been going on for years. Total it up, and its a major lottery win. Out of other people’s pockets, and that makes the poor poorer.

    Then when Philpot retires, we’re going to have to fund him too.

    But you’re worried about 15,000 workers getting a couple of quid extra because they are claiming expenses.

    Your priorities are completely screwed.

  • Alec

    Straw poll suggests that the more likely a LFF thread is to have more than a dozen comments, the more likely most of them are to be down to this weirdo spraying wee-wee all over the place.

    I think we all have been at school with someone who had to be the centre of every playground activity. Bit embarrassing in a fully-grown man.

    But you’re worried about 15,000 workers getting a couple of quid extra because they are claiming expenses.

    Liar. You are a worthless excuse for an intellect.

    ~alec

  • LB

    More made up stats.

    More ranting and raving because you can’t enter into a debate about who is making people poor.

    So are you going to say whether or not your living is dependent on money coming from the poor being taxed?

    Nothing like a hypocrite who will make people poor, but condems the result.

  • Alec

    Go away you strange and unpleasant man. You are of the same moral caliber as a stalker.

    ~alec

  • LB

    You might not have realised what the state has done to your civil service pension.

    The CPI from RPI change has knocked 15% off your income in retirement. The farther you are from retiremen the bigger the hit.

    Then on top, they are stinging you for extra payments. Not, by the way for your benefit. Nope, the money’s going to existing pensioners. By the time its your turn, well, its going to be a choice between paying you lots of money, or the NHS or some other common good.

    Do you think you are going to be able to out vote people wanting their state pension,whilst you retire on a large salary.

    Ah yes, that nice friendly state will look after you, won’t it, you hope.

    Ever asked why MPs are not in the civil service scheme? Why they have their own funded scheme, unlike the unfunded civil service one? Why when there was a short fall, they dipped into the tax payer’s money for more.

  • Alec

    For anyone who’s not a complete and utter weirdo with all the personal ethics of strange and unpleasant tosser, go here to discuss Allen et al..
    ~alec

  • blarg1987

    There is a big diffference between doing the payroll of 15,000 people a week and culpuable in avoiding tax on 15,000 a week.

    It is like with this CQC thing people are being accused have been named in an alleged cover up, they are not guilty of a cover up which is two entirely different things.

  • lionsafterslumber

    Have HMRC put them into liquidation? I guess it is too much to hope that HMRC have demanded the money from all the fraudulent travel and subsistence claims and this is where the £58 million has built up. however I suspect HMRC does not have the confidence in its legal position or the political will. it doesn’t have enough staff any more to go after all the labour providers who are pulling this scam, which scandalously gives hiring temporary workers a tax advantage over hiring permanent workers.

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