Director of Peak PAYE Ltd – a tax avoidance scheme – has been disqualified from director duties for a decade
A director who promoted a tax avoidance scheme depriving HMRC of over £2.5 million in unpaid income tax and national insurance has been disqualified, according to the government’s Insolvency Service, which recently published the announcement online.
Alastair Lunt – who now lives in Orange County, California – was formerly the director of Peak PAYE Limited. The company operated as a ‘disguised remuneration’ tax avoidance scheme, paying its users part of their assignment fee at the National Minimum Wage and the rest as a financial option or salary advance, neither of which incurs income tax or national insurance contributions.
This has cost HMRC “more than £2.5m in unpaid taxes”, as well as compromising the tax compliance of around 250 self-employed individuals. As a result, Lunt has been disqualified as a company director until September 2034.
Peak PAYE Ltd was identified as a tax avoidance scheme and ordered by HMRC to cease operations in November 2022, according to the announcement.
Action against scheme promoter could signal compliance turning tide
HMRC has previously faced criticism over the way it identifies, adds and removes schemes from its list of known tax avoidance promoters, enablers and suppliers list.
This is because there are different time limits in place around how long these schemes remain on the list, depending on whether they are referred under the POTAS rules or the Disclosure of Tax Avoidance Schemes (DOTAS) rules.
Industry experts have suggested that, if schemes are de-listed, it becomes more difficult for self-employed workers to steer clear of them.
While the tax authority has also been slow to take action against known promoters of tax avoidance, however, in this case, action may be a sign that the tide is turning – particularly given the new government’s emphasis on ending tax avoidance in the sector.
As announced at the Autumn Budget, the Chancellor indicated the government would introduce legislation to tackle the “significant levels” of non-compliance in the sector, by making end-clients liable for any unpaid taxes from 2026.
Warning to workers that schemes “don’t work as advertised”
Commenting on Lunt’s disqualification, Claire Entwistle – Assistant Director of Operations at the Insolvency Service – said: “Tax avoidance schemes are marketed as ways for people to pay less tax but do not always work as advertised, landing customers instead with a big tax bill.
“Our public services also rely on everyone paying their taxes and schemes such as this deprive the UK of the revenue it needs to invest in our hospitals, schools and roads.
“Peak PAYE’s director, Alastair Lunt, was required to notify HMRC of the scheme. He failed to do so, causing substantial losses to the public purse.
“We will continue to work closely with our partners at HMRC to disrupt and clamp down on scheme promoters such as Peak PAYE”, Entwistle concluded.
HMRC has launched a campaign to raise awareness of tax avoidance schemes, and the support available to affected taxpayers: https://dontgetcaughtout.campaign.gov.uk/tax-avoidance
Hard to see why criminal charges were not brought, it was widely known st that time that such schemes were illegal. He we then not be welcome in the US if found guilty.
Not sure why this shit is news, any fool that’s contracting, one knows the risks and avoids tax via a limited company which significantly less if outside IR35, but if they are so daft enough to engage with one of these further tax avoidance schemes they are as stupid as the schemes themselves.
Contractors should start paying some tax like the rest of us.
Put into the system as you would like to take out.
Should we put contractors on a reserve list for NHS say as they don’t want to pay for it, but others do.
Do we tier the public service offerings we have based on tax contributions?
If you’re not paying into the system, why expect to benefit at the payment of others