HMRC has added new spotlight 45 to the list of tax avoidance schemes it is investigating, concerning certain employment arrangements offered by some agencies and umbrella companies.
These arrangements may come with the promise that employees who sign up can keep between 80% and 95% of their earnings and be tax compliant. HMRC gives the following example of how such schemes may operate:
the employee receives a small payment which has tax and NICs deducted;
a larger payment, without deduction of tax and NICs, is made at the same time or shortly after;
this larger payment may arrive from a different account than the first payment, possibly from overseas; and
the employee’s payslip may show the larger payment separately and refer to it as something other than pay, such as a loan, credit or investment payment, with no tax or NICs deducted.
HMRC has added new spotlight 45 to the list of tax avoidance schemes it is investigating, concerning certain employment arrangements offered by some agencies and umbrella companies.
These arrangements may come with the promise that employees who sign up can keep between 80% and 95% of their earnings and be tax compliant. HMRC gives the following example of how such schemes may operate:
the employee receives a small payment which has tax and NICs deducted;
a larger payment, without deduction of tax and NICs, is made at the same time or shortly after;
this larger payment may arrive from a different account than the first payment, possibly from overseas; and
the employee’s payslip may show the larger payment separately and refer to it as something other than pay, such as a loan, credit or investment payment, with no tax or NICs deducted.
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