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
“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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71 Responses to “How can a company go bust owing £58 million in tax?”
LB
Which bit don’t you get? Prosecute anyone who has stolen money? Tick.
Get people employed? Tick
What else do you want?
LB
We’ve seen a Legal-E presentation, which shows that a worker on £6 an hour could bank an extra £3.24 from a 40-hour week by avoiding tax on £67 of “legitimately incurred” expenses.
But the big winner is the employment agency that hired them, which saves £33.83 a week in employers’ National Insurance and holiday pay.
Legal-E does nicely too, getting £7.68 in fees. The big loser is HM Revenue and Customs – ie all of us – which gets £44.75 less tax.
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It all depends on whether or not the expenses are legitimate.
If they are no loss, because legitimate expense are an entirely valid thing to claim.
So are they or are they not legimate expenses?
If they aren’t its an easy win for the HMRC. The prosecute each and everyone of the 15,000 workers for the back tax.
Alec
For you to pack it in with the chagrin and passive aggression. I don’t feel any gratitude for your ‘concession’… you started this conversation taking pride in your lack of concern and with question begging. Now you’re attempting to extract merit for something which you should have been exhibiting all along.
You clearly know absolutely nothing about tax legislation/fraud and the background to Employ-E. Fifty eight millions would not be “peanuts”… it would be one of the biggest single tax frauds in HMCR history (at least, ones it wasn’t complicit in).
David Allen and his companies such as Employ-E have been long involved in fleecing not just HMCR but also the extremely low-paid for whom even the £58 or more these scumbags might have been fleecing from them every week isn’t peanuts”.
You don’t care about this? That’s your prerogative. Don’t comment on threads which are discussing them. Or, d’you go onto gardening blogs and demand they discuss knitting?
~alec
Alec
The thing is, you aint exactly hiding your ignorance. You clearly have difficulties with elementary reading.
To be pursued for back tax, one first has had to have failed to pay money which they kept. These tens of thousands of workers have been short-changed… that is, they did not receive the tax (which Allen et al. trousered).
~alec
LB
It’s peanuts in comparison to the real problem. Unfunded state pensions. That was 5,010,000 million two years ago, rising at 734,000 million a year.
Not my figures, but the ONS figures.
Or you can look at it another way.
What would a median wage earner have got by investing their NI compared to what the state gives them for their pension?
Which would have given them more? Welfare state or the FTSE?