Bentleys Chartered Accountants in Bolton are warning employers that HM Revenue and Customs (HMRC) is set to investigate the alleged misuse of tax concessions for temporary workers.

The department has published a business brief on the way that tax, National Insurance (NI) and minimum wage rules are applied to temporary staff, following concerns that some are being used unfairly or illegally.

Jonathan Hargraves, Partner at Bentleys said “There is particular concern over the scheme which allows temporary staff to claim tax relief on travel and subsistence, as it is suspected some employment agencies may be misusing the concessions”.

Examples included wrongly applied exemptions, expense claims incorrectly made tax free, illegal deductions from workers’ pay and breaches of the national minimum wage. HMRC believes that such schemes are often marketed to workers as representing a tax and NI saving for them, when the major beneficiary was in fact the recruitment agency.

HMRC has warned that it will investigate and challenge employment businesses and umbrella companies which do not fully comply with their statutory obligations.

For further information or advice please contact Bentleys on 01204 388675 or visit their website, www.bentleys-accountants.co.uk.

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Editors’ note:  Bentleys Chartered Accountants in Bolton is a four partner practice offering a wide range of accounting and tax services to businesses and individuals.  The firm is a member of the prestigious UK200Group.