The Gangmasters Licensing Authority is conducting a survey of its licensees to see how many are either using payroll services that offer tax savings or operating mobile workers tax relief schemes.
A 3 July letter went out from the GLA to about 1,200 labour providers operating across the food manufacturing and agriculture sectors which advised them that the licensing authority will “be issuing detailed guidance on the risks associated with operating the schemes shortly”.
Payroll companies who employ workers directly to offer tax savings must hold a GLA licence if they have contracts of employment with the workers. Labour providers using companies that are not GLA-licenced risk losing their own GLA licencse.
Companies operating a mobile worker tax relief scheme must be able to provide their appropriate dispensation from HM Revenue and Customs (HMRC) and operate the scheme in line with that dispensation. The GLA will verify any such dispensations with HMRC, the letter said.
The letter requests licensees to “notify the GLA if you are applying a dispensation scheme, operate a mobile workers scheme, or use the services of a payroll/umbrella company, which may also be applying a dispensation scheme. It would be appreciated if you could provide details of any scheme and also the name of the payroll company, if appropriate”.
“There is considerable interest in how tax relief schemes are used in the temporary labour market,” David Nix, head of policy and communications at the GLA, told Recruiter. “The GLA is concerned at reports such schemes are being abused, which leads to losses to the Exchequer and puts legitimate firms at a competitive disadvantage. Workers can also lose out under these schemes. The GLA is determined to prevent and tackle any abuse.