HMRC Is Shite

HMRC Is Shite
Dedicated to the taxpayers of Britain, and the employees of Her Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.

Monday, 10 May 2021

The Rise of The MUCs


Seemingly, more than 40,000 people from the Philippines have been recruited to front British companies as part of schemes costing the UK "hundreds of millions of pounds" in lost taxes.

BBC Radio 4's File on 4 discovered more than 48,000 of these companies have been created in the past five years.

Some staff at Covid test centres run by G4S have been employed by subcontractors in this kind of scheme.

G4S said that, when this came to its attention, HMRC was notified.

The company said it was taking steps to ensure that all agency workers were employed directly and not via a subcontractor.

Employers pay 13.8% in National Insurance contributions on most of their employees' earnings, if the employee earns more than £170 a week.

It works by exploiting the government's Employment Allowance - an annual discount of £4,000 per company on National Insurance contributions. The allowance was meant to encourage companies to take on more workers.

However, recruitment agencies exploit the allowance by employing temporary workers through a series of mini umbrella companies - or "MUCs".

Each individual MUC has only a small number of workers and qualifies for the tax relief. These kind of arrangements can cost the taxpayer hundreds of millions in lost tax revenue a year. 

HMRC said it was using both its criminal and civil powers to challenge what it called "MUC fraud" - and recently deregistered more than 22,000 mini umbrella companies thought to be involved in such schemes.

It says it has made a number of arrests and taken steps to recover unpaid tax from businesses which knew or should have known about fraud in their supply chain.

Tax does have to be taxing.

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