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FS Commercial Respond to GLA Statement

FS Commercial Respond to GLA Statement

We were disappointed but not surprised to learn that the Gangmasters Licensing Authority (GLA) has taken the opportunity to issue a press statement appearing to gloat over our decision not to proceed with a judicial review of the judgement handed down by the Employment Tribunal.

We did not intend to make a further statement.  However, we felt it to be appropriate that we set the record straight as to why we did not appeal, which we can confirm was not on the grounds that we accept that the decision to be correct in law.

As we set out in a statement which was published on our web-site, we were advised by Queens Counsel that it was likely we would win an appeal on the grounds that the judge had made fundamental errors in law when applying what is, in essence, complex tax and Social Security legislation. 

An appeal to the High Court would have meant spending even more money, with no certainty of being awarded costs even if we won.  We took the commercial decision not to incur these additional costs preferring to concentrate our efforts on our existing clients and extending our client base outside the regulated sector. Our view remains that the GLA is working against the very workers it was formed to protect by denying them access to appropriate relief from tax and National Insurance Contributions within the pay period.

In advance of the Employment Tribunal hearing, we tried to get our appeal heard by a tax tribunal as any decision reached by an Upper Tier Tax Tribunal (subject to appeal), would have been binding on all parties.  We were denied this course of action by HMRC even though senior tax inspectors were present throughout the appeal hearing to provide technical input to Counsel instructed by the GLA. 

Due to the fact that HMRC were not party to proceedings, we were unable to cross-examine its interpretation of the legislation. Instead, we are left with a decision which has no relevance apart from in the context of the licensing standards and even then, it is no more than persuasive in future cases.  We suggest that the GLA’s budget of &pound4m will not go very far if it chooses to pursue others for apparent tax liabilities on behalf of HMRC.

We are also saddened by the fact that Mr Broadbent chose to gloat over the fact that we had decided not to incur considerable additional costs which would have been necessary to embark on an extensive appeal process and his jubilation that an appeal will not take place. We can only assume that, by making such emotive comments, he was fearful of a reversal of the judgement.

Although HMRC has issued two general statements, it has failed to take any enforcement action.  This may be due to the introduction of Real Time Information (RTI) which works on the basis of establishing taxable pay and the “earnings” figure which will be used for Universal Credits.  The Pay Day model works on the basis of RTI and provides a real benefit to low paid workers.

It is plainly wrong for the GLA to declare that our payroll model is illegal as we have not received a financial assessment from HMRC upon which we are able to appeal.  Although the judgement has denied us the opportunity to trade in the GLA sector, we continue to provide a compliant service outside of the sector.

Harry Grierson, Business Development Director, FS Commercial Ltd


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