Prisma Recruitment Ltd v HMRC

In Prisma Recruitment Ltd v HMRC [2023] UKFTT 291 (TC) (14 March 2023) the FTT held that Prisma Recruitment Ltd (PR) an employment agency was not liable for PAYE and National insurance on worker’s wages and could be refunded payments made under a time to pay arrangement.

PR sourced workers for a consultancy BGM Group Limited (BGM). BGM used the workers’ services to fulfil consultancy work in the financial services sector for clients such as Royal Bank of Scotland (RBS).

PR accounted for PAYE and National insurance on the workers’ wages and recharged the cost to BGM with commission. PR and BGM considered that the workers were employees of BGM not PR with the agency acting as introducer not hirer. BGM charged RBS a consultancy fee. It did not directly recharge the workers’ wages. BGM then went into administration.

HMRC approached PR...

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