I’ve been to a presentation from HMRC about a website that they have launched that is aimed substantially at people who are being asked to work through an Umbrella Company.
It tells them how they can avoid charges of tax avoidance by understanding their deal, outlining some of the ways that unscrupulous employers or umbrella companies structure payments. There’s a particular issue with people being offered loans instead of wages are a way of circumventing some tax obligations.
Other examples include employers asking people to reduce their wages to minimum wage so that they can get the income in other more tax-efficient ways. In reality, these schemes are often set up mainly for the benefit of the umbrella company rather than the workers.
The website’ message is “don’t get caught“, and this usually means “don’t get inadvertently get caught up in someone else’s tax-avoidance scheme that doesn’t even offer you any benefits in the first place.”