- HMRC publish Spotlight 54 addressing the surge in tax avoidance promoters targeting those returning to work in the NHS to fight the COVID-19 pandemic.
- HMRC are particularly concerned with the use of umbrella companies to lure individuals into a tax avoidance scheme that prevents HMRC from receiving the correct amount of income tax and national insurance contributions (NIC).
- Government believe that umbrella companies offer two payments to the individual:
- The first payment is classed as employment earnings and will go through the umbrella company payroll. This is often at the rate of National Minimum Wage or a flat rate payment.
- The second payment will not be taxable. Government suggest that this payment may be described as: a loan, annuity, shares, a capital advance involving mutual, joint or co-ownership, or a payment derived from a revolving line of credit facility, or some other non-taxable form.
- HMRC urge those returning to work for the NHS to be careful not to sign up to these schemes.
To read the full spotlight, click here.
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