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?”
Alec
Until you blundered into this thread, the “real problem” was Allen and his tea-leaf colleagues and the fleeced low-paid workers.
When are you going to write that piece on pensions? We all are dying to read it.
~alec
LB
Here’s another comparison.
58 million in tax – allegedly.
For how long does that plug the government’s problem.
Deficit spending – 120 bn a year
Increase in the pension debts – 734 bn a year
[http://www.ons.gov.uk/ons/dcp171766_263808.pdf]
33 mins. Oh dear, what to do with the rest of the year?
It’s peanuts. It’s a gnats bite on the back of an elephant.
LB
So what connection have you the LFF. If I write it, do you guarantee to put it up as an article?
SadButMadLad
For an accountant Richard J Murphy seems to have a very poor knowledge of accountancy. If you dig into the story to find out why the figure is so high you will find that the debt is all due to HMRC telling the company that what they are doing is wrong and claiming all the tax that the company did not pass on. So the company hasn’t worked up a £58m debt. And it’s the success of the HMRC in investigating such abuses of the tax system that has led Employ-E to go bust. For Murphy to attack the HMRC when he is paid by their union is surprising. HMRC has the resources to track down this abuse and stop it. The large amount is all due to the claim for back taxes, not debt. Maybe it’s not a lack of knowledge of accountancy, but lack of research that is Murphy’s fault.
Alec
Stop being a troll. Even if it weren’t, you’d be free to put it up on your own blog and link it from here.
~alec