Tax evasion and licence revocation Levelling the playing field for legitimate gangmasters

A gangmaster who did not pay tax and national insurance and failed to provide workers with their full pay entitlement, has lost their licence after losing their appeal against the GLA decision. Gurkha’s UK Limited, based in Sevenoaks in Kent had their licence revoked without immediate effect in April 2008, but appealed against the decision.

At appeal the independent Appointed Person decided that Gurkha’s UK Limited did not successfully challenge any of the GLA findings. GLA officers found:

• no income tax or national insurance had been paid, and there was no scheme in place to collect national insurance, tax or VAT.

• wages were withheld as no holiday pay or statutory sick pay was received by workers

• no evidence that payslips were produced or given to workers

• workers had worked in excess of forty eight hours without signing the forty eight hour opt-out agreement

• workers had not received health and safety training

• contract and record keeping irregularities

Even though the GLA had notified the business that it would be inspected, the first inspection had to be terminated as requested documents were not available.

The second inspection 2 days later found a variety of non-compliances which suggested that the management either did not understand the basic legal requirements of running a business or had chosen to ignore them. Paul Whitehouse Chairman of the GLA said:

“Gangmasters who don’t pay tax do not just gain a competitive advantage over the legitimate gangmasters but are also defrauding the public”.

“The GLA is here to route out the rogues. We are getting results through strong enforcement activities, which is the only way to stop this exploitation. Where we find abuse of vulnerable workers, we will use all of the powers at our disposal in the continuing fight to protect vulnerable workers across the UK.”

Jonathan Shaw Parliamentary Under Secretary of State at Defra said:

“Law-breaking gangmasters who defraud the public purse undermine legitimate business. We want to completely stamp out illegal practices within the industry”

The work of the GLA in partnership with HMRC is now producing real benefits. The GLA uncovered over £2 million of unpaid VAT alone in the first year of operations. Almost 1200 gangmasters are now licensed to operate legally in the UK and the GLA has uncovered worker exploitation, illegal activity that led to the revocation of 61 licences and a recent prosecution for operating without a GLA licence.

Notes to editors

1. The GLA was set up to protect workers in agriculture, shellfish gathering and food processing and packaging. There are approximately 1,200 gangmasters licensed by the GLA. To get and keep a licence, gangmasters must be ‘fit and proper’.

2. It is illegal to operate without a licence, with the maximum penalty of ten years in prison and an unlimited fine.

3. The GLA launched Operation Ajax on 2 June 2008. This will see the Authority increasing its activities across the UK with an 18-month programme of targeted enforcement, involving unannounced raids.

4. It has been an offence to supply labour to the GLA regulated sectors since 1 October 2006, with the maximum penalty being ten years imprisonment and an unlimited fine.

5. All licences that are revoked have the right of appeal including licences revoked with immediate effect.

6. GLA Chairman, Paul Whitehouse, is available for interview. End Media enquiries: 0115 900 8963; 07825 797130 (out of hours)

www.gla.gov.uk