The BBC has reported:
A tax loophole that allows firms to dodge £100m a year in National Insurance will be closed under a new scheme targeting offshore payroll services.
Chief Secretary to the Treasury Danny Alexander said the loophole allowed UK companies to avoid paying tax for thousands of workers.
Mr Alexander said British firms with British staff must pay British taxes.
He will announce the move in a speech to the Scottish Lib Dem conference.
Mr Alexander said around 100,000 employees - mostly teachers, nurses and oil and gas workers - were believed to be paid through offshore payroll services set up in tax havens such as Jersey and Guernsey and could be ineligible for statutory sick pay, but completely unaware of that status.
I was involved in reporting this abuse on Radio 5 earlier this year - revealing that much of it is supposedlyh based in Sark, for which Guernsey is responsible.
Guernsey's claims that it is no longer a tax haven ring very, very hollow. The evidence that it is deliberately creating laws that undermine the UK and which exacerbate poverty in this country is overwhelming. I rest my case.
In doing so I ask that it's co-defendant, Jersey, be found guilty of the same charge.
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Are you quite certain that your headline is correct? Are you sure that its actually a Guernsey scheme?
As for Guernsey being responsible for Sark, I think you’ll find that Sark has its own government. Guernsey does not run Sark. It does have power to regulate certain types of regulated financial services business in the Bailiwick, which includes Sark, but I don’t think Guernsey would have any power of regulation over a payroll company, incorporated elsewhere, but supposedly “operated” from Sark. If my information is correct, this “scheme” is not in any way connected to Guernsey, and my sources tell me that. It is more closely connected to Jersey.
Blame where blame is due. No problem with that, but I think you are factually wrong here.
Emphatically a Guernsey scheme – the biggest is in Sark – part of Guernsey for this purpose
Why do you suggest that Guernsey would be responsible for regulating such a Sark scheme? Was it part of a regulated Sark fiduciary’s business? I would advise you to research thoroughly and think hard before you answer that one.
`.. could be ineligible for statutory sick pay, but completely unaware of that status.` how come? the schemes at issue avoid/evaded employers’, not employees’, NI?
Having been paid by ISS (which operates Intelligent Staffing Solutions and International Subtracting Solutions), whose company address is listed as Sark, Guernsey, I wanted to clarify a couple of points. The employee pays NI, but the employer doesn’t. The employee also pays an administration fee. The advantage to the employee is that expenses (travel, lunch) can be set against PAYE. In my experience, the employee gains very little from the arrangement in the end; the employer is the bigger winner. As the employers in this case are supply teaching agencies, who already pay their staff below the scale rate, they’re on to a good thing.
Sue B
Sark has no company law, so it’s not a Sark company. I’m pretty certain that its not a Guernsey company either. Does anybody know where ISS is actually incorporated?
It does not say on its web site
Search it and the UK address comes up first, curiously
Richard
My point entirely.
Guernsey simply cannot stop somebody forming companies in the UK and elsewhere, and then contracting directly with Sark residents who are not carrying out any regulated financial services business to provide certain services from there. Guernsey can only intervene if the activity which is being carried out from Sark is one which should be regulated. Running a payroll company is very likely to fall outside of that scope altogether, as its simply a trading business of a non-financial services nature.
I really don’t think that your arrows are being aimed appropriately at Guernsey re. this payroll scheme.
I’ve had people trying to ‘sell’ me these schemes in my
professional life. I have resisted, but it’s a problem from a
commercial perspective as competitors have taken them up. I’ll be
delighted if they are stopped. PAYE umbrella company abuses next,
please… though the answer there is for HMRC to streamline a
process for agency workers to get PAYE relief on genuine allowable
expenses so that individuals can easily (and speedily) do it
themselves so that the sharks use their USP. Your previous
commentator is right… most of the benefit falls to the agency and
the service provider.. though the fomer element gets whittled away
by competitive forces so it goes to the client (often, curiously,
the public sector… not that this should count in favour of the
schemes!).
I have an ISS payslip in front of me. The details at the bottom are:
Bedford House,
Sark,
GY9 0SA
Guernsey
TEL: 0800 0284 211
FAX: 0148 1832 996
E-MAIL: info@issgroup.co.uk
WEB: http://www.issgroup.co.uk
Director: G Harker Registration no. 84559
Interesting….Guernsey
Now where is the company registered?
Anyone?
Sark is NOT in Guernsey. It is part of the Bailiwick but it is self-governing. Mail is routed to Sark via the Guernsey Post Office (in the same way that overseas mail to Guernsey arrives via the UK).
Sorry, don’t know, but the postcode is situated on Sark, according to Google maps.
The guy who owns ISS is also a director of Rock Trustees Ltd – also with an address on Sark.
The 0800 number on its website may be a clue. An 0800 number is only available in the UK.
I am reliably informed that company number 84559 in Jersey is ISS. It seems to be a Jersey-registered company, with a so-called administration headquarters (yeah right) in Sark, but with everything carried out from the UK.
Absolutely NOTHING to do with Guernsey…..
You could try looking for a company called Mainpay Ltd, which is owned also owned by Graeme Harker. The registered address is
MAZARS HOUSE GELDERD ROAD
GILDERSOME, MORLEY
LEEDS
UNITED KINGDOM
LS27 7JN
which is the address of an accountant.