HMRC to investigate firm over tax avoidance scheme

Nick Elvin

A company which provides support services to recruitment agencies has been accused of promoting an “aggressive” tax avoidance scheme that can help save firms thousands of pounds in National Insurance Contributions (NICs).

Anderson Group was the subject of an investigation by BBC Radio 4’s Today programme. The broadcaster made secret recordings it says are of Anderson Group’s sales manager promoting the scheme to a recruitment agency.

Under the Government’s Employment Allowance policy, employers don’t have to pay any employer NICs if they usually pay less than £2,000 a year.

The BBC report says this could be exploited by dividing the workers on an agency’s books between a number of small, specially created limited companies, each of which claim the allowance, therefore reducing the agency’s overall NIC bill to zero.

The BBC has given its recordings to HMRC, which says it will “pursue users and promoters” of the scheme.

Meanwhile Anderson Group has denied promoting the scheme, saying it is a product offered by one of its clients, and adding that all of its services are fully compliant with UK tax law.

Julia Kermode, CEO of the The Freelancer & Contractor Services Association (FCSA), said she was concerned to hear the report, adding that her organisation “does not condone these tax avoidance schemes, nor does it represent any firm operating such”.

“The Government’s Employment Allowance Scheme was clearly developed with the intention of supporting small businesses and recognising their important contribution to the economy,” she added.

“We support the media bringing this to our attention so that we can unite in opposing the scheme, and take steps towards eradicating such practices.”