At least 250 Northampton and Watford Gap Roadchef workers close to getting significant pay-outs after 34 years

At least 250 employees at the Northampton and Watford Gap Roadchef service stations on the M1 could finally receive a significant pay-out after 34 years of waiting.

But they need the government and Her Majesty's Revenue and Customs to agree to make the payments exempt from tax to bring an end to the scandal dating back to the 1980s.

Roadchef Employees Benefits Trust Ltd (REBTL) has been fighting on behalf of the 4,000 low-paid workers nationally since 2005 by lobbying lawmakers and meeting MPs.

Chairman Christopher Smith said: “The hardworking people at Northampton and Watford Gap Roadchef service stations are among thousands of low paid people who have waited far too long to get their dues, some dying without ever receiving a penny.

"I met with Chris Heaton Harris at the beginning of this campaign and I am disappointed that his fellow government ministers have not responded more effectively to the case against this injustice - I also met with Andrew Lewer, MP for Northampton South.

"HMRC has previously said on the record that no tax should be payable on this scheme and continually contradicted their own advice with dither and delay."

Cleaners, caterers and other low paid employees at Roadchef motorway service stations were promised a tax-free bonus in 1986 when the owner, Patrick Gee, set up the UK’s first employee share ownership plan (ESOP).

But Mr Gee passed away shortly after, leaving the company in the hands of Timothy Ingram Hill, who transfered shares into a separate trust and sold the company to a Japanese bank in 1998 for £75m.

In 2003, legislation was set out to exempt schemes such as this from tax but the trust had been stripped of its assets by Mr Ingram Hill, so it was ineligible.

A legal challenge was launched by REBTL in 2010 to recover the money, which led to a High Court settlement in 2014 but it emerged millions of pounds relating to the scheme had wrongly been paid in tax by Mr Ingram Hill.

Following pressure from the campaigners and MPs in the House of Commons, HMRC paid the money back to the employee trust in 2018.

But contradiction between HMRC officials on the tax implications of payments, both into the trust and out to beneficiaries, has led to further delay with the pay-outs just a fraction of what is owed.

If the government makes a simple change to the legislation, tax-free payments would be unlocked for the long-suffering Roadchef workers and future employees would be protected from the actions of unscrupulous trustees, according to REBTL.

Mr Smith said: “The Northampton and Watford Gap employees have suffered as a result of some utterly unscrupulous behaviour.

"Ingram Hill’s actions have caused misery for thousands of Roadchef employees – a misery continued by HMRC.

"The Revenue need to do the right thing and bring an end to this mess, allowing us to make tax-free distribution to the beneficiaries.

"An inquiry is urgent to ensure lessons can be learned from this and a resolution brought before more hardworking people die without what’s rightfully owed.”

Meanwhile a cross-party group of MPs have backed a letter to the Treasury Select Committee urging an inquiry into employee share ownership schemes and the conduct of HMRC.

An HMRC spokesperson said: "Due to taxpayer confidentiality we cannot comment on the specifics of the case, but are working to bring it to a conclusion.”