Tackling tax non-compliance in the umbrella company market To tackle the significant levels of tax avoidance and fraud in the umbrella company market, the government will make recruitment agencies responsible for accounting for PAYE on payments made to workers that are supplied via umbrella companies. Where there is no agency, the responsibility will fall to the end client business. This will take effect from April 2026. The measure will protect workers from large, unexpected tax bills caused by unscrupulous behaviour from non- compliant umbrella companies.
This arrangement means those benefiting don’t pay company car tax, which other employees pay, and so this measure will seek to level the playing field.
The changes will take effect from 6 April 2026.
Taxation of Employee Ownership Trusts and Employee Benefit Trusts The government is introducing a package of reforms to the taxation of Employee Ownership Trusts and Employee Benefit Trusts. These reforms will prevent opportunities for abuse, ensuring that the regimes remain focused on encouraging employee ownership and rewarding employees.
The changes will take effect from 30 October 2024.
Clarification of taxable status of Statutory Neonatal Care Pay The government will legislate to clarify the Income Tax treatment of Statutory Neonatal Care Pay. This will ensure the payment is liable to Income Tax and ensure consistency with the tax treatment of other statutory maternity and paternity pay schemes.
Ending contrived car ownership schemes The government will publish draft legislation relating to loopholes in car ownership arrangements, through which an employer or a third party sells a car to an employee, often via a loan with no repayment terms and negligible interest, then buys it back after a short period.
Employment
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