`The Chartered Institute of Payroll Professionals
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HMRC wins disguised remuneration tax avoidance case Published: 26 May 2022 Emailed: 1 June 2022
The case related to Stephen Hoey, an IT contractor who used a disguised remuneration tax avoidance scheme. Mr Hoey worked through an umbrella company based overseas to provide his services to UK companies. The umbrella company disguised his pay as tax-free loans. The court of appeal decision has supported Her Majesty's Revenue and Customs' (HMRC’s) position and clarified that such loans will count as taxable income. This confirms that such schemes are unsuccessful.
The disguised remuneration settlement terms 2020 give those who are currently involved in such arrangements a chance to get back on track. They provide those who may struggle to pay what they owe immediately the opportunity to agree a manageable payment plan. More information can be found in the HMRC briefing issued last month.
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What HMRC is doing about mini umbrella fraud Published: 26 May 2022 Emailed: 1 June 2022
Her Majesty’s Revenue and Customs (HMRC) has released information relating to increased efforts in combatting mini umbrella fraud.
Mini umbrella fraud is when multiple limited companies are set up to enable fraud. Each company has a small number of temporary workers, and a promoter business facilitates its structure. Sometimes referred to as an outsourcing business, it can have linked businesses which support the operation. The creation of the mini umbrella companies and complex layers of businesses within the supply chain help facilitate fraudulent activity. The companies also significantly reduce tax, National Insurance and VAT payments to HMRC. They abuse small business incentives from the government, like employment allowance and the VAT flat rate scheme. HMRC’s fraud investigation service is using its powers to challenge those who are involved or help facilitation of such mini umbrella companies. Tens of thousands of these companies have been deregistered. Where investigations concluded that any business in the supply chain knew, or should have known about the fraud, HMRC has disabled them from recovering VAT on goods or services bought.
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HMRC names another firm as a tax avoidance promoter Published: 9 June 2022 Emailed: 15 June 2022
London-based firm, Peak PAYE Ltd has been named by Her Majesty’s Revenue and Customs (HMRC) as a tax avoidance promoter.
HMRC has ad vised individuals using the tax avoidance scheme promoted by the firm to withdraw from it. They’re also urged to contact HMRC as soon as possible, to avoid receiving substantial tax bills.
This is the third scheme HMRC has publicly named, using its recently granted new powers to name tax avoidance schemes and their promoters. HMRC intends to add to this list in the coming months, but there’s also a reminder that this isn’t an exhaustive list of all tax avoidance schemes, promoters, enablers and suppliers. HMRC’s advice is to steer clear of all avoidance schemes.
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