Labour providers to the fresh produce industry unhappy with mobile worker travel and subsistence schemes used by some of their competitors have won clarification and further investigation by HM Revenue & Customs (HMRC) into the schemes.
Labour supply businesses seek to obtain a tax and national insurance (NI) advantage by creating an overarching employment contract, which is intended to enable temporary workers who would not otherwise be entitled to tax relief on travel and subsistence expenses to gain such relief. This often involves the use of a salary-sacrifice arrangement.
The scheme is often marketed to workers as a tax and NI saving for the worker, but the major saving is to the company that would otherwise be liable for a higher employer’s NI contribution cost.
Mark Boleat, chair of the Association of Labour Providers, said: “Some of our members were concerned that they were being pressed into joining some of the schemes by labour users so that they could pay less for the labour. We raised it with HMRC and so are very supportive of their action.”
Boleat stressed that some providers were using the schemes to try to get more money for their workers, as well as to make more profit for themselves, but added that some of the systems were being legitimately employed.
The Gangmasters Licensing Authority has also been working with HMRC on the matter and conducting its own research on the subject.