Written by: Keith Tully
Reviewed: Friday 29th May, 2015
The Anderson Group, a British recruitment and job consultancy business, has been accused of encouraging the use of aggressive tax avoidance schemes and potentially depriving the Treasury of tens of millions of pounds in the process.
A BBC investigation claims to have uncovered activities described as effectively abusing the government’s Employment Allowance scheme, which was introduced last year and is designed to reduce the National Insurance burden on small companies and charities around the UK.
The accusation is that Anderson Group representatives have been explaining to recruitment agencies how they can pay much less National Insurance by creating numerous small companies that each have a small number of employees.
The group has denied promoting any such schemes but the BBC claims to have secretly recorded its sales manager Ian Moran telling a recruitment agency that it could claim thousands of pounds in allowances by setting up “100 limited companies” each with just “a couple of workers”.
The recruitment agency whose representatives Moran met with were apparently told that they could reduce their annual National Insurance bill down from £300,000 to zero by pursuing the abusive strategies.
In the meeting, Moran conceded that the Employment Allowance scheme “wasn’t intended to be used exactly like this”.
The government’s policies allow companies to claim allowances of up to £2,000 on their National Insurance bills for each of their employees, with the goal being to see businesses becoming more eager and able to add to their workforces.
It is estimated that HM Revenue & Customs (HMRC) would lose out on millions of pounds in contributions if National Insurance contributions were being avoided in relation to tens of thousands of workers around the country.
Reflecting on the schemes and the strategies apparently being used within the recruitment industry, tax expert Richard Murphy told the BBC that those involved will be hoping that there will be no money left to be reclaimed by the time HMRC is in a position to take action against them.
“What they'll say is: well, there's no money in any of these companies, they're all empty shells, therefore, you can sue us, you can put us into liquidation, but they'll be nothing for you to have,'' he said.