Britain moves to close offshore payroll tax loophole

LONDON (REUTERS) - Britain will close a loophole that has allowed some employers to avoid paying payroll taxes by routing wages through overseas intermediaries, the Treasury said on Saturday.

It said over 100,000 people working for British firms were employed through payroll agents based in offshore tax havens such as Jersey, costing the government almost 100 million pounds (S$188 million) a year in lost revenue.

In many cases the workers - mainly temporary agency staff such as teachers, nurses and oil and gas crews - were unaware the taxes were not being paid or that as a result they could lose their entitlement to state sickness or maternity benefits.

Treasury Minister Danny Alexander said measures to end the practice would be introduced in the government's budget statement on March 20.