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UK – Gangmasters’ Licensing Authority wants to stop illicit recruiter tax schemes

30 July 2012

The Gangmasters’ Licensing Authority (GLA), set up to protect workers in the temporary staffing industry, will demand  that big retailers such as Tesco and Asda check whether the recruitment agencies they are using are operating tax avoidance schemes.

The Telegraph writes that this is to put an end to exploitation in the contingent workforce, following on from last week’s decision by HM Revenue & Customs to investigate the staffing industry after it was claimed that hundreds of recruitment companies have allegedly avoided paying tax  of £390 million through illicit expenses schemes. Under these schemes, recruitment companies use some of the workers’ weekly salaries as expenses which have then been claimed as tax relief.

Ian Livsey, chief executive of the GLA, told The Sunday Telegraph that the GLA will renegotiate an industry protocol with retailers to include a clause that will stop the use of staffing firms using such schemes.  

“Recruiters see these schemes as an opportunity to make profit. Very intense price pressures flow from the major retailers through the supply chain down to labour providers. This always creates an environment where people will try to reduce their margins in whatever way they can,” Mr Livsey said to the paper.

“One of the things the GLA will do is to renegotiate the protocol with the major retailers and engage with them more to work with us, to solve these kinds of problems. They can send a very clear message down their supply chain, that they have to comply with the law. It’s not rocket science, is it? I will be insisting that supermarkets bend their back more on this issue,” he said.

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