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

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?

By Richard Murphy, founder of the Tax Justice Network

The 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.

71 Responses to “How can a company go bust owing £58 million in tax?”

  1. Alec

    A lot of things could have happened. It’s what you can substantiate which is important.

    E-Employ and David Allen have form. He’s been struck-off, and HMRC already have stated that it was engaged in tax dodging not avoidance, not to mention money which seems to have been embezzled.

  2. LB

    Are you sure?

    The consequences are dire. What ever party is in charge.

    It’s the end of the welfare state for a start.

  3. Alec

    Yes I’m sure.

    Write it, submit it and I might even read it.

    Now, what are your thoughts on the title story?

  4. LB

    It’s peanuts. It’s worrying about a gnats bite when there’s a herd of stampeding elephants coming right at you.

    If the directors have pocketed the cash, then prosecute, convict jail. Well established laws.

    If not, the workers got work. What’s not to like about people being productively employed.

  5. Alec

    Good. We cleared your complete lack of concern up. (Not to mention basic understanding of tax fraud.) That’s fine.

    There’s no need for you to say anything more now, is there?

    ~alec

Comments are closed.