How could that have happened? How could HMRC have reached the point where it cannot chase that much tax? How limited are resources is this is the case?
By Richard Murphy, founder of the Tax Justice Network
“A TEMPORARY employment agency has gone into liquidation owing HM Revenue & Customs (HMRC) £58 million in unpaid tax.
“Edinburgh-based Employ-E, a division of Legitas Group which is also in liquidation, is owned by lawyer David Allen, who is reported to own a golf course and mansion house in the Borders.
“Employ-E had about 60,000 low-paid temporary workers on its books, who it supplied to recruitment agencies throughout the UK.”
The real question here is, how could that have happened? How could HMRC have reached the point where it cannot chase that much tax? How limited are resources is this is the case?
There is also another question, which is, of course, where is the money? An agency should have been reimbursed all costs including tax. How could it lose that much money?
In the case of both questions surely HMRC should have been on top of this? If not I can only put it down to under-resourcing.
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71 Responses to “How can a company go bust owing £58 million in tax?”
Stephen Henderson
This is the same company that cheated the HMRC out of NI payments fro their temp workers and kept most of the difference for themselves…
Parasites.
http://blogs.mirror.co.uk/investigations/2011/08/we-put-legal-es-tax-dodge-for.html
Kevin Leonard
I would hazard a guess at the possibility of FRAUDULENT BEHAVIOUR on the part of some or all of the directors/administrators and would suggest also that a criminal action has taken place and needs invsestigation.
evanprice
You must realise that this debt could, for example, have been created as a result of an investigation into the company’s affairs. Hence it didn’t ‘build up’ but arose as a result of a lost case, or investigation that didn’t go the company’s way – and the debt couldn’t be paid; hence compulsory liquidation.
It may well be that there should not be an investigation by the official receiver/liquidator – which may result in further recovery – but that would not affect the impact of or need for the liquidation.
LB
How can the state promise to pay pensions then renege on the deal agreed?
Ah yes, by taking all the contributions and spending them on other things. Then to cover up what’s going on, you omit all the liabilities from the books.
So what we have here is Richard Murphy, who’s worried about 58 million, but not worried about 6,000,000 million of debts hidden off the books.
Ho hum, nothing like sweating the small stuff.
Alec
I’m sure you’d welcome to submit a piece on the subject. It does sound like the sort of thing Leftfoot Forward covers.
~alec