HMRC lends helping hand to catering industry

9th May 2011, 12:12pm

HM Revenue & Customs (HMRC) is offering advice to businesses using suppliers to source catering staff to help them appoint labour providers that operate within the law.

HMRC is doubling the number of specialist officers cracking down on labour providers who fail to pay tax. The extra 100 officers will offer free health checks to businesses to help them use legitimate labour providers and tackle fraud within the industry. 

They are expected to bring in an additional half a billion pounds of tax across all business sectors over the next four years. Labour providers found guilty of tax evasion could face jail.

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.

Sectors such as catering where there is a demand for flexible, casual or seasonal workers are at risk from non-compliant labour providers.

The main compliance problems in these 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.

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. Labour providers who think they can exploit their staff and the tax system need to think again."

Mike Eland, director general, Enforcement and Compliance, HMRC added: "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."

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