HMRC have issued Spotlight 54 ‘Tax avoidance promoters targeting returning NHS workers’ warning about new tax avoidance schemes which target workers returning to the NHS to help respond to the COVID-19 outbreak.
HMRC say that the schemes being offered by 'unscrupulous promoters' all have common features, including using an umbrella company, though they may be described in different ways.
In many cases:
- The first payment is declared as earnings and goes through the umbrella company payroll, often at National Minimum Wage levels or a flat rate payment such as £100 per week.
- The second payment, which the umbrella company may claim is not taxable, might be called a loan, annuity, shares, capital advance, a payment from a revolving line of credit facility or some other non-taxable form.
- The umbrella companies might talk about using personal allowances more efficiently or claim you can take home 80% to 85% of your pay.
- The payslips provided might be misleading, showing only the first payment or incorrect deductions.
If you are being offered this type of scheme HMRC advise that you should:
- Check how much tax and NICs you would normally pay on your income using HMRC’s online tax calculator.
- Ask the person offering you the arrangement for a breakdown of any deductions being made and check whether tax and National Insurance contributions have been deducted.
- Compare the figures to see if the scheme you have been offered is legitimate and compliant.
- Think very carefully before signing anything other than a contract of employment and ask questions if you are asked to sign separate agreements for loans, advances, shares, annuities or anything else not relevant to your work.
Anyone who has already signed up to such a scheme is advised by HMRC to leave the scheme as soon as possible and contact them at
External link
Tax avoidance promoters targeting returning NHS workers (Spotlight 54)
