HMRC concerned about tax-avoiding practices of umbrella companies
22 January 2015
Tax-avoiding tactics of employment intermediaries such as umbrella companies, as alleged by Channel 4’s Dispatches earlier this week, are on the radar of HM Revenue & Customs (HMRC).
Thu, 22 Jan 2015
Tax-avoiding tactics of employment intermediaries such as umbrella companies, as alleged by Channel 4’s Dispatches earlier this week, are on the radar of HM Revenue & Customs (HMRC).
HMRC is encouraging people to come forward with feedback on how to tackle such practices.
This week, as reported by Recruiter, the Dispatches documentary detailed allegations of how some companies are significantly underpaying workers and effectively avoiding paying billions in tax.
Recruiter asked HMRC whether, in light of the revelations, it was considering cracking down on such practices.
A spokesperson said HMRC “does not advise employers on how they are to secure anyone’s services” and would “never require the use of an umbrella company or any other particular intermediary structure”.
The spokesperson went on to say the government was concerned about the “increasing use of overarching contracts of employment by employment intermediaries (including umbrella companies) to avoid tax and NICs [National Insurance Contributions]”.
Late last year (16 December 2014), as reported by Recruiter, HMRC published a public discussion document, ‘Employment Intermediaries: Temporary workers - relief for travel and subsistence expenses’.
As well as outlining the government’s concerns, it suggests ways HMRC could tackle them.
The public discussion document is available for comment until 10 February.
Tax-avoiding tactics of employment intermediaries such as umbrella companies, as alleged by Channel 4’s Dispatches earlier this week, are on the radar of HM Revenue & Customs (HMRC).
HMRC is encouraging people to come forward with feedback on how to tackle such practices.
This week, as reported by Recruiter, the Dispatches documentary detailed allegations of how some companies are significantly underpaying workers and effectively avoiding paying billions in tax.
Recruiter asked HMRC whether, in light of the revelations, it was considering cracking down on such practices.
A spokesperson said HMRC “does not advise employers on how they are to secure anyone’s services” and would “never require the use of an umbrella company or any other particular intermediary structure”.
The spokesperson went on to say the government was concerned about the “increasing use of overarching contracts of employment by employment intermediaries (including umbrella companies) to avoid tax and NICs [National Insurance Contributions]”.
Late last year (16 December 2014), as reported by Recruiter, HMRC published a public discussion document, ‘Employment Intermediaries: Temporary workers - relief for travel and subsistence expenses’.
As well as outlining the government’s concerns, it suggests ways HMRC could tackle them.
The public discussion document is available for comment until 10 February.
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