Employment agency Reed is liable for up to £158m unpaid tax due on the salaries of thousands of temps it employed, after it lost its judicial review.
Pay As You Earn (PAYE) and National Insurance Contributions (NICs) should have been paid on the entirety of Reed’s employed temps’ salaries between 1998 and 2006, according to the Upper Tribunal last week, in Reed v HMRC Commissioners [2014] UKUT 0160 (TCC). The potential total includes interest on the tax and NICs due.
Reed had described part of the salary earned by its employed temps as travel expenses and therefore exempt from PAYE and NICs. However, the Upper Tribunal endorsed an earlier First-tier Tribunal judgment which found that the expenses were part of the temps’ ordinary salary payments, and therefore PAYE and NICs were due.
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