WIREDGOV

Gangmasters beware as specialist officers appointed

News Release issued by the COI News Distribution Service on 19 April 2011

HM Revenue & Customs (HMRC) is doubling the number of specialist officers cracking down on labour providers who fail to pay their tax. These specialist officers are expected to bring in an additional half a billion pounds of tax over the next four years.

The extra 100 officers will offer free health checks to businesses to help them use legitimate labour providers and tackle fraud within the industry. Those found guilty of tax evasion could face jail.

David Gauke, Exchequer Secretary to the Treasury, said:

“This government has invested £900m in HMRC to crack down on people who break the rules. Expanding these teams will help make sure that we bring in the additional money that the UK needs. They aim to stop tax losses and increase tax yields by more than half a billion pounds over the next four years. Gangmasters who think they can exploit their staff and the tax system need to think again.”

Mike Eland, HMRC Director General of Enforcement and Compliance, said:

“Building on HMRC’s successful approach to tackling fraud in the labour provider industry, these teams will make it even harder for fraudsters.

“Labour providers are traditionally found in agriculture and construction, where they supply workers to other businesses. But HMRC will also continue to focus its efforts on all sectors where there is a demand for a flexible workforce to meet seasonal and market demand, such as leisure, food, transport, security and cleaning.

“We will tackle fraud by those employers who don’t play by the rules and the organised crime gangs who exploit their workers. We will also work collaboratively with labour users and businesses in these sectors to help them use legitimate providers. This will help to create a level playing field for compliant businesses to compete in the market place.”

Labour providers found guilty of tax evasion face custodial sentences, confiscation of their assets and further sanctions such as Financial Reporting Orders and orders banning them from becoming company directors.

The main compliance problems in the sectors are:

* bogus supply chains;
* repeated liquidations to avoid paying debts;
* failure to keep business records;
* VAT registration applications from bogus traders;
* failure to submit VAT returns;
* failure to make a return of income and gains; and
* failure to pay National Minimum Wage and operate Statutory Sick Pay.

Notes to editors

1. HMRC already has over 100 officers tackling non-compliance by labour providers.

2. More information on the use of labour providers can be found at www.hmrc.gov.uk/leaflets/labour-providers-due-diligence.pdf.

3. Follow HMRC on Twitter @HMRCgovuk.

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Issued by HM Revenue & Customs Press Office
Press enquiries only please contact:

Contacts:

HMRC Out of Hours
Phone: 07860 359544
NDS.HMRC@coi.gsi.gov.uk

Jonathan Hall
Phone: 020 7147 0052
jonathan.hall@hmrc.gsi.gov.uk

Sara Pont
Phone: 020 7147 0394
sara.pont@hmrc.gsi.gov.uk