By Jonathan Davies

One of the UK's leading recruitment companies is promoting tax avoidance by exploiting the government's Employment Allowance scheme, according to a BBC investigation.

The tax avoidance scheme, which Anderson Group denies, is being described as "aggressive" and "abusive".

The BBC claims it could deprive the Treasury of tens of millions of pounds through National Insurance payments.

Anderson Group says it is a "leading provider of support services to the recruitment industry".

The Employment Allowance, which was introduced by the government last year, allows businesses to claim up to £2,000 off their annual National Insurance bill. It was designed to encourage small businesses to take on more staff.

But the BBC secretly recorded Anderson Group's sales manager Ian Moran recommending an agency, which employs 300 people, sets up more than 100 separate companies each with a few workers. Mr Moran claims that would take the agency's National Insurance bill from £300,000 to £0.

The BBC said that Moran told the agency he was pitching to that 10,000 workers are employed in this way, and he plans to double that number to 20,000. That would mean the Treasury losing out on £20 million, if National Insurance was avoided on each worker.

At the pitch, Moran was recorded saying: "It [Employment Allowance] wasn't intended to be used exactly like this.

"Let's be straight, but they set the rules, we'll build a product."

"Schemes like this don't work and anyone thinking of using it should think again," Jennie Granger, head of compliance at HMRC told the BBC.

"Failing to disclose an attempted avoidance scheme is punishable by a fine of up to £1m," she added.

Speaking to the BBC, former chair of the Public Accounts Committee Margaret Hodge said: "There are hundreds of people advising on how you could exploit the system, some of them used to worked for the government, and we need to crack down on those advisors.

"We have a ridiculously complex tax scheme with over 1,100 tax relief schemes. I think we should simplify the system.

"In 2010 the government said they'd simplify the tax system, but we ended up with 100 more tax relief schemes than we went in with."