Tribunal holds recruiter to account for temps tax bill
Over the eight year period, Reed described part of the salary earned by its employed temps as expenses for travel to work that were paid without making deductions for PAYE and NICs.
Reed had argued that, because HM Revenue and Customs (HMRC) originally allowed these arrangements, the employer could not now be expected to pay any PAYE and NICs due on the expense reimbursements.
However, the Upper Tribunal has now endorsed an earlier First-tier Tribunal judgment which found that the expense payments were part of the employed temps’ ordinary salary payments and, as such, PAYE and NICswere due on them. It also found that, when HMRC originally considered Reed’s arrangements, it had not been given a full picture by the company of how they worked.
Ruth Owen, Director General Personal Tax, HMRC, said, "This case shows that HMRC is determined to ensure everyone pays their fair share of tax to fund vital public services.
"The department has used every method at its disposal to secure the tax due, and its position on the case has now been backed by two courts."
Reed Executive commented, "We are disappointed with the Decision of the Upper Tribunal and we will be seeking leave to appeal.
"This is a dispute between Reed and HMRC concerning arrangements that were in place over eight years ago. It does not have an impact on temporary employees past or present. Even if some tax is eventually due, the amount is still in dispute."