Supply Chain Management “No Problem the Man Said and the Die was cast”

12 May 2021


In 2010, Aspire commissioned a film focussing on supply chain management principles which still stands the test of time in today’s world of third-party labour supply arrangements. 

The film script was reviewed by the Association of Labour Providers (‘ALP’) and the Employment Agency Standards Inspectorate (EASI), which is Part of the Department for Business, Energy & Industrial Strategy.  In fact, the EASI expressed an interest in buying the rights to the film but could not obtain funding from Government.       

If you have 18 minutes spare, it might be worth a watch.

Click here to view the film.

Clients consult with Aspire for guidance on a wide range of complex subject matters including the following:

  • Employment taxation
  • VAT
  • Construction Industry Scheme (CIS)
  • Due Diligence Risk Assurance Processes
  • Supply Chain Risk Management Principles
  • Regulatory Interventions by HM Revenue and Customs (HMRC)
  • IR35 “Off-payroll working arrangements”
  • CITB Levy
  • National Minimum Wage Regulations
  • Alternative Dispute Resolution (‘ADR’)
  • Appeals to the tax tribunal, upper tribunal and beyond

In consultation with HMRC’s Fraud Investigation Service, Aspire developed and implemented a robust supply chain due diligence programme covering all types of extended supply chain arrangements. 

HMRC endorsed this risk-based approach in May 2019 ahead of the publication of HMRC’s official guidance in July of the same year.   

This approach is designed to mitigate supply chain risk and to ensure that no tax loss arises due to fraudulent transactions. The risk assurance programme also incorporates HMRC’s guidance publications on supply chain management which have evolved since 2017 when HMRC first amended its guidance on governance principles.    

In the event we are instructed by a client to provide an opinion on the legitimacy of any type of labour supply chain, our approach will always be to include reference to the following;

  • operational aspects,
  • anti-avoidance legislation,
  • disclosure requirements,
  • risk management assurance principles (including due diligence), and
  • HMRC investigatory and recovery powers including transfer of liabilities in appropriate circumstances.

When requested to opine on a set of circumstances, our aim is to provide a balanced view so that the client can make an informed decision as to whether or not to proceed with any course of action.

Our team of dispute resolution specialists has assisted many clients in successfully concluding HMRC investigations involving an extended supply chain arrangement similar to the one identified in the recent media speculation. 

HMRC concluded that no tax loss had arisen and brought the enquiry to a swift conclusion. 

Case Study

Between 2016 and 2018, Aspire formed part of a legal team instructed to represent a significant number of UK companies which had all been de-registered for VAT and, at the same time, denied entitlement to make a deduction under section 4 of the National Insurance Contributions Act 2014, being the “Employment Allowance”. Many of these companies had directors based in the Philippines.  

As part of our work, it was necessary for Aspire to conduct face to face presentations in Manila and beyond to conduct the following;

  • facilitate appropriate introductions,
  • articulate to the appellant directors the grounds for the decisions (as the case law cited in the decision letters was extremely complex),
  • present the possible grounds of appeal,
  • explain the complex tax tribunal system,
  • partner with a local Business Process Outsourcing business to open communication channels, 
  • obtain formal instructions by way of ink signed engagement letters,
  • agree our professional fees.   

After presenting the evidence to HMRC, the decisions relating to all appeals were overturned on review by an Officer unconnected with the case.  The Independent Reviewing Officer (‘IRO’) for the Employment Allowance decision found:          

“I have reviewed all correspondence between HMRC, yourselves and your client’s former representatives and also considered all relevant legislation and technical guidance.

I have concluded that there is insufficient evidence to support the decision made and consequently I am unable to uphold the decisions, which are hereby cancelled”.

The IRO for the VAT decision also found in favour of each appellant citing different grounds but nonetheless they are of equal importance:

“The decisions were based on the assertion that your clients had been involved in fraudulent activity intended to achieve an unwarranted tax advantage.

I have concluded that the decisions that have been issued have not been substantiated in the decision letters, because your clients have not been given an explanation as to why the registrations are to be cancelled or what fraud is alleged to have been committed, and you have not been presented with any evidence. Consequently, I am unable to uphold the decisions, which are hereby cancelled”. 


Aspire continue to represent a range of clients dealing with similar types of litigation before the tax tribunal and also those who wish to implement rigorous due diligence processes to avoid such litigation. 

We are happy to receive instructions to provide consultancy services in relation to supply chain due diligence utilising our due diligence framework together with interventions by HMRC (using the “Kittel Principle”) and other regulatory bodies.

“No Problem” is a phrase which is often overused in a fast-paced environment.  Make sure that your salesforce or team of consultants watch the film – it is a bit outdated, but the key messages are still very much relevant today.

If you would like to discuss any supply chain management, please contact us at             

Aspire Business Partnership

12th May 2021