HMRC warn against multiple umbrella companies

HMRC have issued Spotlight 71 highlighting some of the potential indicators of tax avoidance arrangements for individual agency workers and contactors who are engaged by and moved between umbrella companies. Key concerns that should ring alarm bells include:

• employment contracts: being unexpectedly moved to a new umbrella company being engaged by one company but paid by a different entity or being asked to sign more than one employment contact;
• payslips: unexpected changes to key details and amounts including discrepancies between the amount of pay declared and the amount actually paid to the worker; and
• salary payments: workers moved to a new payroll system for no good reason as HMRC note that this could be a sign that they are already taking action against existing avoidance arrangements.

Perhaps obviously HMRC encourage individuals to check the published list of named tax avoidance schemes and...