HMRC’s Spotlight 60 provides an overview of tax avoidance arrangements used by some umbrella companies and highlights common warning signs to help individuals avoid becoming involved in tax avoidance.
Spotlight 60 draws attention to contrived arrangements such as disguised remuneration schemes used by some umbrella companies which aim to allow agency workers and contractors to keep more of their earnings.
The guidance covers HMRC’s publication of the details of tax avoidance schemes and their promoters and provides an overview of commonly promoted avoidance arrangements.
Much of the guidance is devoted to spotting the warning signs of tax avoidance schemes, for example:
the individual is asked to sign a short employment contract or there is no written contract at all;
the umbrella company offers an enhanced amount of take-home pay, or describes the arrangement as ‘tax efficient’, with some elements described as ‘non-taxable’; or
payments to individuals are made partly under PAYE and partly via other arrangements which are not disclosed on the payslip.
The spotlight also points out that, not only do most avoidance schemes involving umbrella companies fail leaving users facing a large tax bill, but also often charge users a fee for using the scheme.
HMRC’s Spotlight 60 provides an overview of tax avoidance arrangements used by some umbrella companies and highlights common warning signs to help individuals avoid becoming involved in tax avoidance.
Spotlight 60 draws attention to contrived arrangements such as disguised remuneration schemes used by some umbrella companies which aim to allow agency workers and contractors to keep more of their earnings.
The guidance covers HMRC’s publication of the details of tax avoidance schemes and their promoters and provides an overview of commonly promoted avoidance arrangements.
Much of the guidance is devoted to spotting the warning signs of tax avoidance schemes, for example:
the individual is asked to sign a short employment contract or there is no written contract at all;
the umbrella company offers an enhanced amount of take-home pay, or describes the arrangement as ‘tax efficient’, with some elements described as ‘non-taxable’; or
payments to individuals are made partly under PAYE and partly via other arrangements which are not disclosed on the payslip.
The spotlight also points out that, not only do most avoidance schemes involving umbrella companies fail leaving users facing a large tax bill, but also often charge users a fee for using the scheme.
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