An aggressive tax avoidance scheme, linked to one of the recruitment industry’s highest-profile names, is being liquidated in a move that could prevent HM Revenue and Customs from recouping millions of pounds.
The scheme, which experts say raises questions over triggering a possible criminal investigation, has been promoted by Anderson Group, one of the sector’s leading financial services firms. It has been used by recruitment agencies supplying low-paid workers to businesses including Marks & Spencer and Dixons Carphone.
The arrangements – which work by setting up thousands of tiny firms to exploit VAT and national insurance rules that were originally designed to help very small businesses – have netted vast windfalls for those involved.
The Guardian has seen evidence showing that the closure of parts of the scheme followed Anderson being asked by HMRC’s fraud and investigation service for details about the large numbers of VAT registration applications made on behalf of Anderson clients last year.
Documents show that almost 2,000 of the Anderson scheme’s mini companies are now being simultaneously liquidated.
Tax experts said the moves 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.
Dan Neidle, a tax partner at City law firm Clifford Chance, said that in his view the scheme had been set up to avoid tax. He said: “I am troubled by the involvement of multiple Philippine individuals, when there is no commercial or tax reason to involve anyone offshore. The obvious inference is that the purpose of choosing the Philippines was to hinder HMRC’s ability to investigate and recover any tax due.
