LONDON: A tax loophole is denying British youth and unemployed workers the chance to earn a living or to be trained in a new career.
The sneaky technicality, which is fully supported by the European Union, is predominantly used when projects are funded from ‘European regional funds’ such as roads and schools. But it can also be used for large scale housing projects or schemes such as the Olympic Village for London 2012.
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This clause allows foreign agency workers to live and work in the UK whilst paying taxes in their country of origin where, especially in Eastern Europe, the wages and taxes are considerably lower than in Britain.
This is making more loyal British firms who pay their staff PAYE tax in the UK and train up apprentices or retrain older, unemployed workers, uncompetitive against the companies who are happy to use the aggressive tax avoidance scheme which have been attacked by politicians of all parties.
Furthermore, at the last voting session in Strasbourg, MEPs even set up a committee to look into cross border tax avoidance despite approving legislation which overrides domestic law to help lower youth unemployment.
The EU continues to justify the rules, which means that employers’ national insurance contributions and income tax is not paid into the Treasury to assist with services such as the NHS which the foreign workers are entitled to use.
One official told Breitbart London: “If foreign workers are prepared to work for the equivalent of the minimum wage and in-work benefits and British people are not, then that is the UK’s problem, not the EU’s.”
A construction worker insider who has been meeting with HMRC to discuss the situation, which he views as a huge missed opportunity to train up young Brits, said that the companies were using generous in-work benefits provided by the government and paid for by National Insurance Payments and tax to top up the low wages.
In reality, he said, the foreign workers are paid less than the minimum wage since they were contracted only for a few hours but really work for ten to twelve.
