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HMRC investigation: After Starbucks now NHS Trusts are in the spotlight for tax avoidance issues

HMRC investigation: After Starbucks and Google, now NHS Trusts are in the spotlight for tax avoidance issues

 

Kevin Green, CEO of the Recruitment and Employment Confederation, contributed to ITV’s story and commented after it aired saying:

“NHS trusts are under huge pressure to make cost savings. So I can understand the appeal of an accountancy firm’s offer to eliminate the need to pay VAT on temporary staffing bills.

“But these new models are complex and opaque and involve a very different way of interpreting employment law and VAT liability than in the past. We can’t see any benefit to the NHS of using these models other than avoiding VAT. This poses a huge risk for NHS trusts and recruiters involved if HMRC were to rule in the future that it is not a legitimate way to interpret tax regulations.

“Recruiters tell us they feel under tremendous pressure to sign up to these models to retain their contracts with the NHS but they are really worried about being saddled with huge bills for unpaid VAT if, down the road, HMRC declare that these practices constitute illegitimate tax avoidance.

“We are calling on HMRC and the Department of Health to give clarity to recruiters and NHS trusts about whether these new models represent tax avoidance or not.”

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