At the end of August 2022, it came to light that HMRC had identified three more tax avoidance schemes as it continues its clampdown on non-compliant companies across the UK.
These latest editions, two based in the North West and one based in London, bring the total of tax avoidance schemes unearthed to 14, with 12 of those being listed this year. The HMRC list is updated whenever a new company is unearthed.
This growing list has been described by Fred Dures of PayePass – an umbrella company payroll and auditing company – as “the tip of the iceberg”, so we can expect many more rogue operators to be added to the list as the months pass.
Contractors are often unknowingly involved
What typically occurs is the contractor is often unknowingly involved as they are paid the national minimum wage, with the remainder of their pay being made as a loan (disguised). This avoids the necessity to pay National Insurance Contributions (NIC) and Income Tax.
It’s essential that contractors perform their due diligence
The published list on the Gov.uk website is not exhaustive or definitive and industry experts expect there to be many more additions as time goes by.
One message that is clear is that contractors need to be more thorough in their due diligence and not simply be blinded by the promise of more pay from their contracting activities. If it sounds too good to be true, then it usually is.
You can find out more about IR35 and our services, which include contract reviews, legal expenses insurance for tax investigations, and business insurance on our website.
Sources:
https://www.contractorweekly.com/tax-a-ir35-news/tax-avoidance-schemes/
