HMRC: Warning issued over rogue "gangmasters"
Labour providers are agencies that supply temporary workers to meet seasonal and market demand and are sometimes called “gangmasters”.
HMRC is urging publicans and other business to carry out checks to ensure, where possible, that the gangmasters are paying VAT and other taxes.
HMRC has warned there is a risk that employers could unknowingly hire workers who are in the UK illegally or are earning below the National Minimum Wage.
This could result in enquires by HMRC and costs for the business, damaged reputation and even prosecution.
Marie-Claire Uhart, director of specialist investigations, said: “HMRC has found problems with fraud and unpaid taxes in the labour provider field and this might increase as companies employ more casual labour for the Games. HMRC routinely tackles attempts to defraud the Exchequer, including the use of false invoices and hijacked VAT registrations.
“Businesses that use labour providers can help prevent these forms of tax abuse – and avoid involvement in fraudulent supply chains – by being alert and asking the right questions.”
Businesses should ask:
* Does the labour provider need/have a Gangmaster Licensing Authority (GLA) licence?
* What is the history of the business?
* Is it a live company on the Companies House register?
* Have you visited the trading premises? Are they consistent with the business of finding and employing workers?
* Do they obtain workers from other labour providers?
* Are their proposed fees realistic, allowing the business to meet statutory minimum wage and tax obligations and still make a profit?
* Do they have Employers’ Liability Insurance?
* Are you making payments to a third party. If so, why?
* Is the business VAT registered and set up for PAYE? Obtain a copy of the VAT certificate.
* Is the business paying its workers the National Minimum Wage?
* Do the workers being supplied have the right to work in the UK?
Checks could include:
* Check directors’ identities by asking for passports
* Ask for copies of Certificate of Incorporation, VAT registration certificate and GLA licence
* Verify VAT registration details with HMRC before you use them
* Ask for their bank details
