HMRC updates its list of Tax Avoidance Schemes

Another tax avoidance scheme has been exposed by HMRC this month. As part of its ‘Don’t Get Caught Out’ campaign, under which HMRC has the power to ‘name and shame’ tax avoidance schemes, they have identified Peak PAYE Ltd, as a promoter to steer clear of. By paying contractors National Minimum Wage, and then paying the remainder of the contractors’ wage disguised as a financial option or as a salary advance, the promoter promised contractors that they could avoid paying tax and National Insurance Contributions.

HMRC's warning

HMRC point out that “Tax Avoidance Schemes are advertised as clever ways to pay less tax when in reality, they rarely work as the promoters promise, and it is the users or contractors who end up with the big tax bills.”

Contractors should always be on the alert for schemes which attempt to disguise the true level of pay they receive to reduce their tax liability. The ‘Don’t get Caught Out’ campaign includes guidance for umbrella contractors on how to identify the risk of getting inadvertently involved in tax avoidance schemes, what they should expect to see on their payslips and some examples of warning signs.

More information can be found on the Government’s dedicated tax avoidance website