Contractor loan schemes using umbrella companies

HMRC has published a guide, Tax avoidance schemes aimed at contractors and agency workers, advising taxpayers to use caution before entering into schemes aimed at contractors and agency workers which channel income through umbrella companies, often in the form of loans with no tax or NICs taken off.

This guide complements Spotlight 45, in HMRC’s tax avoidance schemes series.

HMRC has also updated its guide Understanding off-payroll working (IR35) to refer to these schemes.