HMRC to Chase Recruiters First for Tax Shortfall in Labor Market

The UK tax authority said Tuesday it will target recruitment agencies if the so-called umbrella companies they use fail to pay payroll taxes.

Recruiters or end clients who use umbrella companies—agencies used by businesses to pay temporary workers— would be jointly liable for any unpaid payroll taxes under a proposed crackdown to tackle tax avoidance in the temporary-labor market.

The UK’s proposed law will apply if a worker is employed by a recruiter under a contract of employment regardless of umbrella companies being in the supply chain, His Majesty’s Revenue and Customs said during a webinar.

“Joint and several liability ...