HM Revenue and Customs (HMRC) have named a further three tax avoidance promoters.
They have added to their naming list:
- Bluemoore Associates Ltd,
- Resource Hubco Ltd, and
- PAYE services Ltd as tax avoidance schemes.
They urge anyone using these umbrella companies to get help to exit.
Bluemoore Associates Ltd (BAL). The users sign a contract of employment that will pay them a basic salary at a rate of National Minimum Wage or National Living Wage which is subjected to tax and National Insurance Contributions. Scheme users also receive a second payment. This second payment is paid by a third-party, or by BAL itself, without tax or National Insurance Contributions being deducted.
HMRC have previously published Spotlights on Disguised remuneration schemes involving umbrella companies (Spotlight 35 and Spotlight 60) based on similar arrangements.
Resource Hubco Ltd – The scheme user enters an employment contract with RHL who make composite payments to the scheme users for services provided by the user. The first element is a National Minimum Wage/living wage salary that is subjected to tax and National Insurance contributions, and a secondary element described as an “advance drawn down” which is not.
HMRC’s view is that these payments are actually no different to normal income, and tax and National Insurance contributions are payable
PAYE Services Limited (PSL) – Arrangements involve users signing a ‘Contract for Employment’ with PSL that pays at a rate of National Living Wage (NLW) for each hour worked. They also sign a “Master Advance Agreement”. The user provides services to the end client and submits timesheets to PSL for the work done. PSL pays the user a single payment comprising of the NLW salary (with any holiday pay) and the Advance. The payment in relation to the Advance is made without the deduction of Income tax or National Insurance contributions.
PSL sells its services via the website PAYE.com. PSL claims that it commits to provide further benefits to its employees, and that it is obliged to make employee incentivisation payments from its gross profits in the form of contributions to an “Investment Employee Incentivisation Scheme” (IEIA); where it intends to invest these contributions in a Cayman hedge fund to generate further profits for its Beneficiaries. HMRC has seen no evidence to suggest this exists or takes place.
If you are involved in any of these or other tax avoidance schemes and are not already talking to HMRC about your tax position, you should contact HMRC as soon as possible. There is more information about how to do this. You can also report a tax avoidance scheme to HMRC.
PAYadvice.UK 29/6/2023