Payroll company liquidated after expense claim abuse.

Article published by Payroll World

A payroll company, which set up an expense claim tax avoidance scheme, has been shut down by liquidators.

Henderson Loggie were appointed to close Legitas last week after it became clear that the business, providing payroll services to temporary agency workers, had close to £18m in unsustainable debts.

The low-paid agency worker’s food and travel expenses claims were not taxed in the avoidance scheme that saw more than 90% of the illicit savings go to the umbrella company and HMRC miss out on National Insurance contributions.

The Recruitment & Employment Confederation (REC) says it wants “a level and legitimate playing field for the industry” and is calling on the government to be firmer with employers that fail to comply with expense claim regulations.

In addition, REC chief executive, Kevin Green, said: “We once again encourage all members to conduct thorough due diligence of any travel schemes they use and to avoid schemes that deduct below National Minimum Wage or that do not require workers to provide receipts for the expenses they incur.”

First reported in The Mirror, the huge losses at Legitas were made despite more than £100m in client wages being processed by the payroll business.