Beware the Border Agency’s been busy targeting illegal workers

From the newspapers it’s easy to get the impression that nothing much happens in Britain during the long summer holidays. But just a quick trawl through the BBC’s recent news archives is quite revealing. There are all of the ’local’ stories from across the UK that individually very rarely make any national headlines but when looked at from afar do give a slightly different picture.

Look at the UK Border Agency for example, they’ve been busy during the summer. In just the few weeks between mid-June and mid-August there were reports of five separate raids by them on small businesses allegedly employing illegal workers. In every case two or three migrant workers were reported as working illegally at each business. The stories all end in the same way the employers facing fines of £10,000 per worker for failing to carry out the necessary checks or maintaining the proper records of those checks.

But what is rarely mentioned in the news is that if the employers are eventually found to have knowingly employed ’illegals’ then they will face unlimited fines and/or prison sentences. Now, as it happens, all of the cases reported above involved fast-food outlets or restaurants. And all but one was in a relatively small market town rather than in a major urban area. In other words, being a small, remote business is no guarantee of ’immunity’ or invisibility as far as these investigations are concerned.

Hand job anyone?

Perhaps when the holiday season’s over the next target will be the hand car wash market. This area is already of interest to SOCA (the Serous Organised Crime Agency) although rather than directly looking for illegal workers, it’s more probable that its interest would be related to potential money-laundering activities in what is almost by definition a ’cash’ business. If SOCA is looking at this sector, it would be very surprising if HMRC and the Benefits Agency didn’t also have it on their radar somewhere, if only from the perspective of tax evasion and benefit fraud. One issue that doesn’t seem to get raised about these operations is that many of them are based on abandoned petrol forecourts that at some time in the past were owned by the oil majors. But just who actually owns these derelict sites now? Funnily enough, the last report of a raid on one of these operations that we could find was from September 2009. It involved three separate car wash locations in Lincolnshire.

Okay you say, but those were ex-forecourts. Nothing to do with ’legit’ operations. So let’s look at petrol retailing today. Good staff are always hard to find.

Small towns don’t have the same labour pool as large conurbations.

A hard-pressed employer may be tempted to overlook some of the paperwork that they’re supposed to check before taking anyone on because shifts need filling next week. Some employers may even be tempted to offer ’cash in hand’ rates with no questions asked.

Then we have the older, perhaps smaller, forecourts where the ancient rollover wash has simply packed up. Much as they’d like to put in a new one, the cost looks daunting.

Along comes a ’friend of a friend’ who ’knows someone’ who’d be interested in ’renting’ the old bay and putting in a few kids to man a hand wash. Sounds attractive a guaranteed income every week and maybe a few more customers drawn to the site by the prospect of a cheap wash while they shop.

Of course there will be some honest entrepreneurs out there needing a start in their own business. And with little or no start-up capital involved, a hand wash service is as good a way as any. The dealer feels safe after all he’s not employing the washers so who cares whether they’re legal, pay tax or claim benefits?

Money may be the least of your problems

So why are we talking about these things in a column devoted to money? The simple answer is that when times are hard it can be tempting to look for solutions that may edge into illegality.

Unfortunately when the spotlight turns on them, the real criminals have a habit of disappearing into nowhere, leaving the ’legit’ business holding the proverbial baby. We’ve already mentioned the ’standard’ £10,000 fine per illegal employee as well as the potentially unlimited fines for knowingly employing them. Where tax or benefit fraud are concerned, if the authorities can’t find the individual employees who’ve done a runner, they’ll turn to the employer whom they still have in place, and try to recover the due tax from them (along with penalties and interest).

If the thought of that isn’t enough of a deterrent then the potential consequences of getting caught up in a money-laundering scam should terrify any normal business owner just try this for a flavour of where that can lead: The Proceeds of Crime Act 2002 (PoCA) Part 7: "Entering into or becoming involved in an arrangement which facilitates the acquisition, retention, use or control of criminal property by or on behalf of another person: section 328 Conviction. can result in imprisonment for up to 14 years and/or an unlimited fine".

Other penalties can include the seizure of any assets related to a business involved in money laundering. That could potentially include the premises where such a business was allowed to operate. And apart from any criminal aspects, bear in mind the potential problems with your business insurance. Any claims against you under your employers or public liability insurance might prove interesting if your insurer discovers that the activities concerned weren’t quite legit.

As they used to say on ’Crimewatch’ don’t have nightmares but to do that you need to make sure that your business is fully within the law.

Topics