An aggressive tax avoidance scheme, linked to one of the recruitment industry’s highest-profile names, is liquidating hundreds more companies, according to filings made after a Guardian investigation exposed how the exchequer could lose millions.
It was revealed last week that the scheme – which has been promoted by Anderson Group and which experts say raises questions over triggering a possible criminal investigation – was found to be simultaneously winding up almost 2,000 tiny companies that formed part of the tax avoidance arrangements.
The moves are said to make it extremely difficult to pursue the defunct firms for any potential VAT or national insurance debt – particularly as each mini-company appears to only have a Philippines-based director and barely any retained assets.
In the latest development, hundreds more similar mini-companies linked to the scheme are being disbanded, according to insolvency filings published by the official public record, The Gazette.
Scores of the latest companies to be put into voluntary liquidation had Filipino directors plus ties to Anderson Group, when checked against public records and internal Anderson documents seen by the Guardian.
The arrangements were designed to save tax by setting up thousands of tiny firms to exploit VAT and national insurance rules that were originally intended to help very small businesses.
To do that, promoters transferred contracts of low-paid workers from a single large employment agency into a web of tiny companies. So, if an employment agency previously supplied a warehouse with 300 workers, the scheme’s promoters might create 150 new companies, each employing two workers.
The voluntary liquidations of the companies linked to Anderson followed initial questions posed by HMRC’s fraud and investigation service last year, which asked Anderson for details about the large numbers of VAT registration applications made on behalf of its clients.
The Guardian’s investigation triggered a series of parliamentary questions by Frank Field MP, the chairman of the House of Commons work and pensions select committee, who last week asked the chancellor: “What assessment has [the chancellor] made of HMRC’s ability to investigate and recover tax revenue lost to aggressive tax avoidance schemes promoted by the Anderson Group and others?”
Responding this week, Mel Stride, financial secretary to the Treasury and paymaster general, said: “HM Revenue and Customs does not comment on individual taxpayer cases. Where companies go into liquidation leaving unpaid debt to the exchequer, HMRC will seek to maximise returns through use of its powers of recovery in appropriate cases, and by working closely with the liquidator.”
Anderson did not respond to an invitation to comment on the latest liquidations.
In a statement previously issued in response to the Guardian’s request for comment, the group commercial director, Steven Zahab, said: “Anderson Group is a global provider of support services across a range of markets and sectors. In all cases our services are provided in accordance with the law as it stands and, where appropriate, under advisement from counsel.
“If the law changes, then our services do so as appropriate. We constantly seek QC or other professional opinion to ensure that we act within the rules at all times.”