drossall wrote:I suppose that the (rather central) point that is not made clear in the news reports is this: Was the scheme used to benefit the staff (by reducing tax liabilities), or the employer (by reducing the total salary bill - i.e. the staff get roughly "market rate" after deductions, but the employer avoids the "overheads" of paying enough to cover proper tax liabilities?
I believe that the reports did indicate that staff were told that they must use this scheme, which might imply the latter scenario. In that circumstance, the driver for defrauding HMRC would have come from the employer, even though the legal liability might lie with the staff. Maybe you might then see how someone previously accustomed to PAYE, or not employing accountants or lawyers, might fall into a trap. It would also look like quite cynical behaviour from the employer, given that the main risks were to the staff.
But anyone knowingly not paying fair tax should ask questions.
These people weren't staff they were freelance contractors. The agencies referred to find them work with various companies and the company pays the agency who then pay the contractor after taking there cut. It's up to an agreement between agency and contractor how they receive their money from the agency.
I'm quite familiar with this system having taken on a fair few contractors or consultants,as the more pretentious call themselves, during my working career. Fees paid for contractors who said they were on the loan scheme and those paying tax normally were no different.
We generally used contractors for implementation projects where extra people were needed temporarily or where particular specialist knowledge was required for a short period.
'Give me my bike, a bit of sunshine - and a stop-off for a lunchtime pint - and I'm a happy man.' - Reg Baker
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