Accountancy Live reports that temp agency, Employ-E has gone into liquidation with an unpaid tax bill of at least £58 millions; although £22.5 millions of that could have come from money owed by the the parent group, Legitas which went into liquidation last month.
When this occurred, Nick Sommerlad of the Daily Mirror described both companies’ owner, former solicitor David Allen in somewhat truculent terms. Two years earlier, Sommerlad had covered the practice of Allen and other specialist pay-roll providers to offer assistance to low-paid PAYE workers on contracts such as warehouse work or catering.
Bosses are claiming hard-earned tax breaks for many of Britain’s lowest-paid workers – then pocketing the lion’s share.
They include warehouse staff for firms like Tesco and housing maintenance workers on council contracts who are all getting their payslips from an outfit called Legal-E. Here’s how it works.
Temporary workers who travel to different jobs are allowed to claim extra travel and food costs against tax at the end of the year.
Or, specialist payroll firm Legal-E, known as an “umbrella” company, does it for them – greatly reducing the amount they pay HM Revenue and Customs in income tax and National Insurance.
Legal-E explains it to workers like this: “From the savings made in the tax and NI payments, Legal-E puts some of this money back into the workers’ pay to make them better off.”
The key words here are “some of”.
We’ve seen a Legal-E presentation, which shows that a worker on £6 an hour could bank an extra £3.24 from a 40-hour week by avoiding tax on £67 of “legitimately incurred” expenses.
But the big winner is the employment agency that hired them, which saves £33.83 a week in employers’ National Insurance and holiday pay.
Legal-E does nicely too, getting £7.68 in fees. The big loser is HM Revenue and Customs – ie all of us – which gets £44.75 less tax.
As the Herald reports, Allen – who owns a mansion plus private golf course in the Scottish Borders – was struck-off as a solicitor for “unbefitting conduct” after he “improperly used client funds for his own purposes and for the benefit of other clients and failed to keep properly written-up accounts”.
PS As this is unrelated to Israel and/or Muslims, keep off that subject.