HMRC name three more tax avoidance schemes that don’t work

They we have added (25th September 2023) three more names to the published list of tax avoidance schemes

  • Olympus Contracting Limited,
  • Hamilton Bradbury Ltd and
  • Edge Umbrella Ltd.

They urge anyone involved in these (and similar schemes) to get in touch if using these umbrella companies so they can provide help to exit.

Olympus Contracting Limited

The arrangements involve users providing their services to end clients through Olympus Contracting Limited (OCL). The users sign a contract of employment that will pay them a basic salary at or around the rate of National Minimum Wage or National Living Wage salary which is subjected to Income Tax and National Insurance contributions (NICs). Scheme users also receive a secondary payment. This secondary payment is paid by a third-party or by OCL itself without Income Tax or NICs being deducted.

Hamilton Bradbury Ltd

Scheme users sign a contract of employment and Loan Agreement with a company based in the Isle of Man, Hamilton Bradbury Consulting Ltd (HBC). HBC then enters into a contract with Hamilton Bradley Ltd (HBL), a UK umbrella company for the provision of the scheme user’s services. HBL then contracts the scheme user’s services to a UK intermediary/agency. The UK intermediary/agency then contracts the scheme user’s services to the end client. The end client pays the UK intermediary/agency for the scheme user’s services, who in turn pay HBL. Following the deduction of a fee, HBL pay the remaining amount to HBC. HBC pays a National Minimum Wage/National Living Wage salary to the scheme user and a payment, described as a loan, pursuant to the Loan Agreement, which is made without deductions of Income Tax or National Insurance contributions.

Edge Umbrella Limited

The arrangements involve individuals providing their services to end clients or agencies through Edge Umbrella Limited (EUL) as their employer. The individuals also enter an agreement with Deposlo Holdings Ltd where individuals grant the right to enter an Annuity Agreement in exchange for payments (the Grantee Payments). The individuals receive payment from EUL. However, tax and National Insurance contributions (NICs) are only deducted on a small part of the amount. This is evidenced on the payslips and figures reported to HMRC. It is HMRC’s view that the larger amount paid without tax or NICs deducted, is for the Grantee Payments, but paid by EUL on behalf of Deposlo Holdings Ltd. It is also HMRC’s view that the Grantee Payments are additional disguised income for services provided by individuals through EUL, and the entire payment should therefore be subject to tax and NICs.

If you’re involved in a tax avoidance scheme

If you’re worried about becoming involved in a tax avoidance scheme, or think you’re already involved and want to get out of one, HMRC say they are there to help.

If you’re using any of the schemes shown on the lists or similar schemes, HMRC strongly advises you to withdraw and settle your tax affairs to prevent building up a large tax bill.

If you’re already speaking to someone in HMRC about your use of a tax avoidance scheme, you should contact them to discuss this further.

If you do not have an HMRC contact and you want to get out of a tax avoidance scheme, contact HMRC.

Report a tax avoidance scheme to HMRC

You can report tax avoidance schemes and those offering you the schemes to HMRC. You can do this by using the report tax fraud or avoidance online service.

You can submit this form anonymously. You do not have to give your name, address or email.

If you cannot use the online form, you can contact HMRC.

PAYadvice.UK 26/9/2023

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