HMRC have listed another rogue umbrella promoting tax avoidance schemes which do not work.
Named on 27th July 2023, Easyway Umbrella Limited of Hemel Hempstead, joins the pool of umbrellas and other organisations that have been judged as promoting failed tax avoidance schemes.
Maybe not such an Easyway, this umbrella joins others named such as Compliant Pay Ltd (or no so compliant pay), ContractorCare (or is it don’t care for contractors), Nicely Paid (or not so nicely paid) and others.
How the Easyway method claimed to work
Individuals provide services to end clients as employees of Easyway Umbrella Limited (EUL).
Employees receive part of their EUL remuneration at a rate close to the National Minimum Wage or National Living Wage which is subject to Income Tax and National Insurance.
Employees receive the balance of their remuneration, disguised as a loan, credit or other payment, without the deduction of Income Tax or National Insurance.
HMRC position
HMRC considers the untaxed payments as normal income, and tax and National Insurance contributions are payable.
HMRC have previously published information on umbrella companies offering to increase your take home pay Spotlight 45.
HMRC are aware that some umbrella companies operate more than one scheme, eg a standard compliant scheme and a non-compliant scheme.
HMRC advise employees of EUL to familiarise themselves with the guidance and to satisfy themselves that the correct amount of tax is being deducted on their income.
Tackling non-compliance in the umbrella company market consultation – open until 29th August 2022
The HMRC have an open consultation on tackling non-compliance in the umbrella company market. Respondents have until 29th August 2023 to share their views on government proposals to protect workers from non-compliant umbrella companies.
Following concerns raised by industry and employees, the government is consulting on potential measures to regulate the umbrella company market.
The consultation also seeks views on measures to tackle non-compliance in the sector, including mandatory due diligence.
Your input could help to protect workers from surprise future tax bills, while supporting businesses and growth in the economy. You can read more and find out how to respond on the tackling non-compliance in the umbrella market consultation
PAYadvice.UK 28/7/2023