The government has added another tax avoidance scheme – Alpha Republic Ltd – to its growing list of companies currently posing a threat to workers, recruitment agencies and businesses engaging temporary workers.
Alpha Republic Ltd (of 85 Great Portland Street, London W1W 7LT) paid those working through this scheme a salary equivalent to the National Minimum Wage (subject to normal payroll deductions), before paying workers a secondary amount, which was untaxed.
This method is in line with many other tax avoidance schemes, which pay workers through loans, commission or via trusts and claim that the payments are non-taxable.
Fred Dures, founder of specialist payroll auditor, PayePass, said, “The fewer tax avoidance schemes there are, the better – that’s a given. But the government could and should do a lot more to stop this illegality once and for all.
“Naming these schemes one by one is just papering over the cracks. The elephant in the room is being ignored. Why the government hasn’t delivered on its promise to regulate the umbrella industry is beyond me. It’s a no-brainer.
“Regulating the umbrella industry wouldn’t just protect workers and the businesses engaging them, it would raise billions in tax revenue at a time when it’s needed more than ever. Until then, the sector must self-police.”
Echoing Dures’ thoughts was Julia Kermode, founder of IWORK, which protects temps and independent workers:
“On one hand, this is progress, which should be welcomed. Tax avoidance schemes pose a major threat to independent workers. Just look at the Loan Charge, which left tens of thousands of contractors with devastating tax bills after having been lured into working through these dodgy schemes.
“More must be done, though. And the government’s alarming lack of action regarding umbrella industry regulation means tax avoidance schemes will be around for some time to come.”
The government’s list of tax avoidance schemes can be found here.
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