Benefit cheats net widens
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• Directors of companies which
help staff defraud the benefits system could face seven years in jail and unlimited fines.
A Department of Social Security Green Paper, Beating fraud is everybody's business, sets out proposals to save the estimated £7bn-a-year cost of social security fraud: enough to reduce every household's tax bill by £435 a year.
The Green Paper cites one example which, according to lawyers, could be common practice within the haulage industry: "An employer paid her 20 employees £3.60 an hour but gave them time WS to sign on as unemployed; her honest competitor was paying £4.60 an hour. The fraudulent increase in the first employer's profits cost the taxpayer £40,000 a year."
The cheating employer also benefited from reduced National Insurance contributions.
Ann-Marie Thompson, an employment specialist with Eversheds, says industries with large numbers of part-time and self-employed jobs are among the most vulnerable. "The implication is that these industries are more sympathetic to providing 'assistance' to their staff."