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Umbrella companies: risk of tax avoidance

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HMRC has published new guidance to help contractors and agency workers working through umbrella companies check that they are not involved in a tax avoidance scheme.

Check your payslip if you work through an umbrella company explains that receiving more money than is shown on the relevant payslip could be a sign of tax avoidance and advises workers/contractors to use HMRC’s online tax and NIC calculators to check how much tax and NIC they should expect to pay on their income.

The guidance also:

  • provides payslip examples that show different amounts of net pay;
  • explains the risks of using disguised remuneration schemes; and
  • explains how to report any tax avoidance arrangements made by an umbrella company.

Check if you are at risk of tax avoidance is an interactive risk checker which helps identify the most common signs of tax avoidance and suggests whether the employment arrangements ‘could involve tax avoidance’.

Issue: 1555
Categories: News