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Scotland-based employment agency Employ-E has appointed insolvency firm Henderson Loggie as a liquidator after the company was hit by a £58 million tax bill. The firm, owned by businessman David Allen, was formerly known as Legal-E.
It has been confirmed this week that officers of HM Revenue and Customs have submitted a claim of £58 million in unpaid tax and penalties against Employ-E. Liquidator, Claire Middlebrook, said on Wednesday: “My first step is to carry out an investigation into the position and workings of Employ-E with the aim of realising any assets it has for the benefit of the creditors.”
Employ-E had up to 60,000 staff who were supplied as temporary workers to recruitment agencies. Employ-E has been described as a management service for recruitment agencies whose workers fall under AWR regulation. It offered temporary workers, who worked at or around the national minimum wage, a way of “maximising their earnings by offsetting legitimate expenses against their gross pay”, according to the company. The employees were paid off before the appointment of Henderson Loggie as liquidators.
This comes after one of Mr Allen’s other companies, Legitas Group Limited, has also gone into voluntary liquidation in the past weeks. Legitas, which provided an outsourced payroll service for temporary workers and staffing firms, came under criticism for allowing agencies to exploit temporary workers through a ‘non-compliant’ tax relief scheme. The scheme, suspended earlier this year, allowed recruiters to make savings on employers’ national insurance and holiday pay contributions. HMRC has continuously criticised such pay-day-by-day tax relief models, saying they did not comply with the law.