Tax evasion cases are rising: what does your agency need to know?

tax evasion recruitment agency

19th June 2018

We’ve mentioned in a number of blogs that tax compliance is one of the biggest concerns for recruiters at the moment. You’ll probably have seen the recent reports that the number of serious evasion cases – those involving more than £50,000 of tax – investigated by HMRC has risen by 18% over the last year. This sharp increase is evidence that the authorities are coming down hard on those who fail to adhere to the law, a fact that recruiters simply can’t hide from.

The clamp down on evasion

The simple fact is, any recruiter who isn’t sure if they, their agency or its contractors are compliant with the requisite legislation will be taking a huge risk, as it is now easier than ever for authorities to identify fraudulent activity. The Common Reporting Standard (CRS) makes it simpler for officials to share tax information across borders, meaning they can now access wider details of offshore bank accounts. And, with more countries signing up to the CRS, the number of non-disclosure jurisdictions is shrinking.  If we look at the UK alone, the Inland Revenue was given five years – starting back in 2015 – to triple the number of criminal investigations into major tax crimes, so even more of its resources are being channelled in to this crackdown. As a growing number of states demonstrate their commitment to tackling evasion, we can expect to see an increasing number of cases surface across the globe.

Criminal consequences

With constant changes to international laws and regulations surrounding compliance, not to mention the wide variation in rules across borders, it is vital for agency owners to make sure that they are up-to-date with developments.  This includes ensuring that consultants are compliant too. As Jason Collins, head of tax, litigation and regulatory at law firm Pinsent Masons warns, “Businesses may also end up in court if their employees have helped others to evade tax.”

Compliance is vital

There’s no doubt that it is now incredibly vital for agencies to ensure that not only are the contractors they place compliant with the tax rules in the country in which they operate, but their own staff are also operating within the law. In order to be absolutely sure that contractors are correctly taxed, we strongly advise recruiters to partner with a specialist international contractor management company. Contact the team today to find out more.

 

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