Very interesting BBC Radio 4 programme on the abuse of complex employment intermediaries.
Jo Maugham, a tax QC and the founder of the campaigning group the Good Law Project, said the number of companies File on 4 discovered were set up in this way was “staggering”.
“It’s not as though this is some tiny piece of tax avoidance – you know, where your local minicab firm isn’t declaring all of the fares that it receives. This is industrial scale tax abuse,” he said.
“I mean it’s really absolutely extraordinary, hundreds of millions of pounds if not billions of pounds is likely to have been lost due to HMRC’s apparent disinclination to tackle this abuse.”
Anneliese Dodds, former shadow chancellor, called upon HMRC and the government to do more to tackle these schemes.
“We do need to see greater action being taken by HMRC… and the Conservative government really should have been facing up to this, because certainly, the alarm bell has been rung by many over many years…”
HMRC said it was using both its criminal and civil powers to challenge what it called “MUC fraud” – and recently deregistered more than 22,000 mini umbrella companies thought to be involved in such schemes.
It says it has made a number of arrests and taken steps to recover unpaid tax from businesses which knew or should have known about fraud in their supply chain.