The Gangmaster’s Licensing Authority is congratulating itself on identifying more than £2 million in VAT payments that are due to be paid to the Exchequer during the first 12 months of the authority’s operation to March 2007. There have been a further 289 licence applications since this period so the GLA calculates that the total of VAT payments is likely to increase.

As part of the GLA licensing process, individual labour providers must also ensure they follow VAT registration rules. The GLA and HM Revenue & Customs have revealed that at least 40 of the businesses that have applied for a GLA licence had not previously been registered with HMRC.

The GLA, which has come under fire from the fresh produce industry in recent months for not being wholly cost effective, claims that these VAT payments demonstrate that even though it was initially set up as an agency to protect exploited workers, the GLA can also benefit the UK economy.

“I am very pleased to see the quantifiable benefits that have been achieved due to the close partnership between the GLA and HMRC,” said GLA chairman Paul Whitehouse. “It is fantastic to see that the public no longer have to subsidise the non-payment of tax by these gangmasters.

“Assisting the recovery of UK taxes is an important role of the GLA. The £2m recovered goes to show that the GLA can benefit the UK economy. Gangmasters who avoid paying taxes may often break the law in other areas. We will continue to take this very seriously as part of the fight to end worker exploitation.”

The calculation was based on the companies’ turnover in the GLA regulated sectors alone, which was provided as part of the licence application process. These figures were adjusted to take into account the input tax that the businesses may be able to reclaim.

Andy Armitt, deputy director, HMRC Labour Provider Unit said: “The work of the GLA in partnership with HMRC is now producing real benefits. The identification by the GLA of businesses trading in the licensed sector has greatly assisted HMRC in ensuring compliance with taxation obligations and in protecting the rights of workers.”

Meanwhile, the GLA has this week shut down a Suffolk gangmaster. Vilnius Recruitment Ltd of Leiston supplied workers to cut roses and cabbages and to work in a duck factory and had its licence revoked with immediate effect by the GLA on Monday for failure to ensure the safety of the workers and for a total disregard for their welfare.

GLA officers found among other abuses that cars used to transport the workers were still uninsured - despite prior warnings, accommodation charges that were unacceptably high, overcrowded accommodation, and the agricultural minimum wage, overtime and holidays not being paid.