Andy Hogarth, the chief executive of temp agency Staffline, says he is certain that an increasing number of companies are operating fraudulent travel and subsistence schemes, which see them claim back extra money in tax relief.

Under such schemes, staff are paid monies such as travel expenses and lunch as a benefit outside their actual wage. This allows tax relief to be claimed back, which is then not passed in full to the worker as it should be.

Following an article in Monday’s The Daily Telegraph, putting at £390m the total value that the UK recruitment industry is earning through such means, Hogarth told Recruiter he thought there had been a rise in such activity lately.

He said that he believed there had been an overall rise in such activity since January 2011, when a judgement against multi-sector recruiter Cordant Group had seemed to definitively outlaw such actions, as reported in Recruiter.

However, it has been acknowledged that the situation is not as clear-cut as it could be.

Gangmasters Licensing Authority (GLA) director of strategy Darryl Dixon tells Recruiter that “whenever we get any information… we will be investigating it”, and says that there were a number of such investigations currently ongoing.

“We will look at whether a scheme is compliant with the law and with the purpose of the law,” he adds.

An HMRC spokesperson also says that its actions against such activity are ongoing, and that it will “bring in an additional £7bn by 2014 through tackling abuse of the tax rules including the use of schemes which try to circumvent the PAYE, National Insurance and minimum wage rules”. However, HMRC was unaware of the origin of the £390m figure quoted by the Telegraph.

HMRC spokesman concluded: “Most employers are tax compliant; those that are not can expect to be hearing from us.”