HMRC ‘Tax avoidance – don’t get caught out’ campaign
HMRC has refreshed its campaign to help contractors, who are self-employed or engaged through an agency or umbrella company, understand their pay arrangements. The intention being that individuals understand if they could be at risk, so they don’t get an unexpected tax bill. HMRC has asked that we share access to these resources with our readers.
HMRCs focus is on making sure that individuals understand whether appropriate levels of tax and national insurance are being accounted for, whilst also reminding them that income tax and employee national insurance contributions are their responsibility as well as employers. HMRC’s refreshed campaign includes several resources and, whilst the resources apply to all arrangements, there is a clear focus on umbrella arrangements. The tools HMRC have made available include
- A payslip guide
- An interactive risk checker (as reported on previously)
- A guide to what it’s like to work through an umbrella company
HMRC is also publicising the following information
- quick guide to spotting signs of tax avoidance, to help contractors learn how to recognise the signs and understand the financial risks of tax avoidance schemes
- personal stories of people who have been affected by getting caught up in tax avoidance, and
- how to report a tax avoidance scheme to HMRC if they are worried about becoming involved in tax avoidance or want help to get out of a scheme.
These resources are all geared at informing individuals, in the hope that they will shy away from arrangements which place them at risk of an underpayment of tax and national insurance. This may be a difficult balance to achieve, as perpetrators of tax avoidance arrangements will, no doubt, counter this with assurance of compliance.
The resources do not focus on recruitment companies, supply chains, or the risks of working with non-compliant providers, but may be useful tools to support your own risk analysis or help justify why you do not wish to work with particular models or providers. Compliant umbrella providers may also be able to use the tools as reassurance for nervous or new contractors.
About the author
Theresa Mimnagh is Associate Director at the recruitment and employment law specialists Lawspeed. Lawspeed group corporate clients benefit from immediate up to date advice on staff engagement and related regulation; employment status; client, IR35, PAYE and umbrella contract templates; contract review/negotiation; self-employment and CIS contract templates; trade membership and government representation; accreditation services and a state of the art digital contract management platform.
Adrian, a highly experienced lawyer, founded Lawspeed in 1997. He is responsible for developing our extensive portfolio of products and services, including the widely used Lawspeed contract templates. Adrian is an expert on “recruitment law” and specialises in contracts, regulatory compliance, employment status and dispute handling. He is chair of the trade body the Association of Recruitment Consultancies, the only lawyer lead recruitment trade body in the UK. Adrian and his co-director Ravi devised Standards in Recruitment as a vehicle for helping drive up standards and compliance in the industry.
Adrian is our lead in discussions with the government over regulatory evolution. Apart from assisting with client support, Adrian’s primary role is research and development into methods of business delivery, our latest service Proterms being his most recent project. Adrian heads our IR35 lawyers team.