HM Revenue & Customs (HMRC) is to double its number of specialist officers cracking down on labour providers who fail to pay their tax.

Tax evaders face custodial sentences, confiscation of their assets and further sanctions such as financial reporting orders and orders preventing them from becoming company directors.

HMRC cites main compliance problems as:

• bogus supply chains;?
• repeated liquidations to avoid paying debts;
• failure to keep business records;?
• VAT registration applications from bogus traders;
• ?failure to submit VAT returns;?
• failure to make a return of income and gains; and?
• failure to pay National Minimum Wage and operate Statutory Sick Pay.

David Gauke, exchequer secretary to the Treasury, says: “This government has invested £900m in HMRC to crack down on people who break the rules. Expanding these teams will help make sure that we bring in the additional money that the UK needs. They aim to stop tax losses and increase tax yields by more than half a billion pounds over the next four years. Gangmasters who think they can exploit their staff and the tax system need to think again.”

The additional 100 officers will also offer free health checks to businesses to help them use legitimate labour providers and tackle fraud within the industry

Tom Hadley, Recruitment and Employment Confederation (REC) director of policy and professional services, says: “This is a big step forward, there is nothing more frustrating than to be placed at a commercial disadvantage by doing the right thing. Unfair practices create market distortions and have a huge impact on legitimate businesses as well as on workers. We need clarity and consistency in the way that regulations are applied, we also need real clout in terms of government enforcement.”