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HMRC identifies three more tax avoidance schemes as calls for umbrella regulation grow

As election draws nearer, latest development highlights the importance of regulation for a beleaguered sector, says industry veteran

HMRC has added three further tax avoidance schemes to its list of known promoters, enablers and suppliers of tax avoidance – a move which demonstrates how important regulation remains to the umbrella industry. 

The three non-compliant umbrella companies were added to the list on 6th June. All were ‘disguised remuneration’ schemes, involving convoluted payment methods to umbrella workers to avoid attracting income tax and national insurance contributions on the payments:

  • Cube Umbrella Limited, registered at Todd Street, Bury, Greater Manchester, BL9 5BJ
  • Mountain View Admin Limited, registered at Shelton Street, London, WC2H 9JQ
  • 365 Umbrella, registered at Bessborough Road, Harrow, HA1 3EX

The addition of the schemes, just weeks out from the general election, serves as a reminder of the issues facing the sector.


Umbrella regulation is no closer 

Despite having promised to regulate the umbrella sector, the government has not delivered, leaving thousands of flexible workers at risk of tax avoidance and non-compliance.

Such activity also deprives the treasury of tax revenue, with an estimated £400m lost to tax avoidance in the umbrella sector in 2020/21 alone.

Rather than seeking to recover this revenue from the operators of tax avoidance schemes, HMRC instead targets the workers who have fallen victim to these schemes – an approach which has drawn criticism from across the industry.

As the general election approaches and the major political parties set out their policies, though, these issues are yet to be addressed.


“Enhanced enforcement efforts” needed

Speaking following the addition of the schemes to HMRC’s list, Crawford Temple – CEO of Professional Passport – called for a more cohesive, industry-wide approach to addressing non-compliance.

While commending “HMRC’s commitment” to “naming and shaming” tax avoidance schemes, Temple conceded that scheme operators are “not being held to account quickly and effectively enough”.

“The architects of these schemes need pursuing and the schemes shut down”, Temple said, but “after a year, the shamed companies disappear off the list and are free to start trading again. That cannot continue”, he added.

With a general election on the horizon, Temple believes that the issue of tax avoidance in the umbrella sector should be a greater priority for the major political parties. 

He called for “enhanced enforcement efforts, coupled with stringent penalties for those found guilty of orchestrating such schemes”, as well as a zero-tolerance approach to tax evasion and avoidance from the next Government. 

But “enforcement alone is not enough”, Temple warned. The umbrella industry “must also focus on fostering a culture of compliance and transparency”, working towards “a collegiate approach” which would “help to build trust and cooperation between the government and the legitimate players within the sector”.

“By working together, we can identify and address the root causes of non-compliance, whilst promoting best practices and raising industry standards”, Temple concluded.

If you think you might be involved in tax avoidance, you can check HMRC’s list of known tax avoidance promoters, use HMRC’s online risk-checking tool, or report tax avoidance online.

1 Comment

  • Andy says:

    The government (HMRC) really need to strengthen legislation around Tax evasion and stop calling illegal schemes (if they are illegal) avoidance – This is were some of the confusion lies – you could say paying into your pension is a method of tax avoidance but there’s nothing wrong with it.

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