Orange & Gold Blog

Recruiters face inquiry over £390m 'tax avoidance' scheme

HMRC is to investigate the recruitment industry following allegations that agencies are running multi-million pound "tax avoidance" schemes

HM Revenue & Customs has promised to crack down on scores of staffing agencies said to be using non-compliant expenses schemes for temporary workers, which cost the taxpayer an estimated £390m a year and risk exploiting millions of temps, according to the Telegraph newspaper.

Under the so-called "travel and subsistence" expenses schemes, recruiters block out a certain amount of workers' weekly wages as expenses.  They then claim tax relief on those expenses and bank most of the money they receive as profit, rather than passing what is rightfully owed onto the low-paid employee.  Watch this space.