Asked by: Claudia Webbe (Independent - Leicester East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate his Department has made of the level of tax (a) evasion and (b) avoidance in each of the last four years.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
HM Revenue and Customs (HMRC) estimates the size of the tax gap, which is the difference between the amount of tax that should theoretically be paid to HMRC and the amount that is actually paid. The latest tax gap estimate for 2021-2022 is a record low of 4.8 per cent of total theoretical tax liabilities. The tax gap statistics are published annually and are available at: https://www.gov.uk/government/statistics/measuring-tax-gaps.
Asked by: Claudia Webbe (Independent - Leicester East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the finding by the British Retail Consortium that workers in Leicester's apparel manufacturing industry are underpaid by over £2.1 million a week, whether he plans to take steps to help ensure that those workers receive backdated pay in line with the National Minimum Wage.
Answered by Kemi Badenoch - President of the Board of Trade
Exploiting vulnerable workers for commercial gain is despicable and the Government will not stand for it. The Government is determined that everyone who is entitled to the National Minimum Wage (NMW) receives it.
All businesses, irrespective of size or business sector, are responsible for paying the correct minimum wage to their staff; and consequences for not complying with paying NMW can include fines of 200% of the arrears, public naming and, for the worst offences, criminal prosecution.
HMRC take seriously and review all complaints from workers referred by the Acas helpline, or received via the online complaints form, and investigate as appropriate. If anyone thinks they are not receiving at least the minimum wage, they can contact Acas, in confidence, on 0300 123 1100 or submit a query online using the link: https://www.gov.uk/government/publications/pay-and-work-rights-complaints(opens in a new tab) .
HMRC NMW has undertaken joint operations with partner agencies in Leicester for a number of years and have historically investigated more than 150 textile businesses, including multiple employers operating in Leicester; recovering over £215,000 in wage arrears for over 400 workers and issued over £325,000 in penalties. HMRC NMW has also opened a significant number of investigations in Leicester since 1 July 2020.
HMRC continues to take proactive steps in this industry: we have written to over 18,000 workers in the textile sector flagging their entitlement to minimum wage, common causes of underpayment and encouraging confidential reporting of employers, and have written to over 2,500 employers in the sector highlighting the main risks which lead to NMW underpayment.
The British Retail Consortium has alleged that workers in the Leicester textile sector are underpaid by £2.1m per week. Previous and ongoing HMRC investigations have not identified non-compliance with NMW on this scale.
We continue to work closely with industry bodies and would welcome any evidence they have in support of the findings by the British Retail Consortium.
Asked by: Claudia Webbe (Independent - Leicester East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to tackle (a) illegal levels of pay, (b) furlough fraud, (c) double record keeping and (d) VAT fraud in Leicester’s garment Industry.
Answered by Jesse Norman
HMRC enforce the National Minimum and National Living Wage (NMW) in line with the law and policy set out by the Department for Business, Energy and Industrial Strategy (BEIS).
All businesses, irrespective of size or sector, are responsible for paying the correct minimum wage to their staff. Consequences for not complying with paying NMW can include penalties of 200% of the arrears, public naming and, for the worst offences, criminal prosecution.
Breaches of NMW legislation are normally a civil matter, but the most serious cases involving obstruction, falsifying of documents by, for example, creating a second set of ‘compliant records’ or wilful failure to pay workers the minimum wage that form part of a pattern of wider criminality may be referred to HMRC’s Fraud Investigation Service and subsequently to the Crown Prosecution Service who decide whether or not to prosecute.
Since 2012-13, HMRC’s NMW team has investigated 150 textile trade employers (59 employers in Leicester), recovering over £215,000 in wage arrears for over 400 workers and issued over £325,000 of penalties to employers.
As a result of the widespread allegations about labour exploitation in Leicester this year, a new multi-agency taskforce (Operation Tacit) led by the Gangmasters and Labour Abuse Authority (GLAA) has been set up to bring together the enforcement bodies (HMRC, Employment Agencies Standards Inspectorate (BEIS), Leicestershire Police, National Crime Agency, Leicester City Council, Department for Work and Pensions and Home Office Immigration Enforcement).
Across tax and the NMW, HMRC have a significant number of live investigations involving businesses in the textile sector (over 90 NMW investigations and over 30 tax investigations), a large majority of which relate to Leicester. In 2019/20 HMRC completed 25 separate investigations into the VAT affairs of businesses in the textile trade in Leicester alone and in doing so recovered more than £2 million of tax that would otherwise have been lost and facilitated 21 director disqualifications relating to the textile sector.
HMRC are also taking steps to counteract those seeking to abuse the COVID-19 support schemes. In line with other “payment-out” regimes, HMRC undertake pre-payment authentication and risking to identify and block fraudulent claims. HMRC also carry out proportionate risk-based post-payment compliance checks to test the accuracy of claims they receive. HMRC are able to retrospectively audit all aspects of the COVID-19 schemes, with scope to claw back fraudulent or inaccurate claims, applying their existing compliance approaches.
HMRC take seriously and review all complaints from workers referred by the Acas helpline, or received via the online complaints form, and investigate as appropriate. If anyone thinks they are not receiving at least the minimum wage, they can contact Acas, in confidence, on 0300 123 1100 or submit a query online using the link: https://www.gov.uk/government/publications/pay-and-work-rights-complaints.
Asked by: Claudia Webbe (Independent - Leicester East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many businesses have been fined for paying below the national minimum wage in (a) Leicester East constituency and (b) the UK in each of the last three years.
Answered by Jesse Norman
The Government is determined that everyone who is entitled to the National Minimum Wage (NMW) should receive it. HMRC enforce the National Minimum Wage (NMW) and National Living Wage (NLW) in line with the law and policy set out by the Department for Business, Energy and Industrial Strategy (BEIS).
All businesses, irrespective of size or business sector, are responsible for paying the correct minimum wage to their staff. The consequences of not complying with payment of NMW can include fines of 200% of the arrears, public naming and, for the worst offences, criminal prosecution.
HMRC take seriously and review all complaints from workers referred by the Acas helpline, or received via the online complaints form, and investigate as appropriate. If anyone thinks they are not receiving at least the minimum wage, they can contact Acas, in confidence, on 0300 123 1100 or submit a query online: https://www.gov.uk/government/publications/pay-and-work-rights-complaints.
The total numbers of businesses which have failed to pay the correct rates of national minimum wage and have received penalties as a result in the last three years are provided in the table below:
Year | Leicester East constituency* | UK |
2017-18 | >5 | 810 |
2018-19 | >5 | 1008 |
2019-20 | >5 | 992 |
* Businesses with a registered address within the Leicester East postcode.