The Chartered Institute of Payroll Professionals
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• 1st Choice Umbrella Ltd - the scheme user enters into an employment contract with 1st Choice Umbrella Ltd (1CU) and are issued a share in the cell company, Omni Contractor PCC Ltd (OCP) that is unique to the scheme user. The scheme user submits timesheets to 1CU who then invoice the agency or end client for the work done by the scheme user. 1CU retains approximately 10% of the invoiced amount, which is purportedly for covering any Capital Gains Tax (CGT) the scheme user may be liable to in relation to the share and transfers this amount to OCP. OCP claim they will return this amount to the scheme user when their CGT liability is confirmed. 1CU also retains a further amount of around 16-18% and then pays the scheme user a National Minimum Wage / National Living Wage salary. OCP pays the scheme user a separate amount but without deductions for tax and National Insurance Contributions (NICs). This supposedly represents the increased share value held in OCP. HMRC’s briefing on settling disguised remuneration scheme use and / or paying the loan charge is available, here. Disguised remuneration schemes are arrangements that pay loans instead of ordinary income to avoid income tax and NICs. The loan charge has been introduced to tackle the use of disguised remuneration schemes. People who anticipate having difficulty paying what they owe under the loan charge will be able to agree a manageable payment plan with HMRC depending on individual circumstances. There is no limit, and people will be given as long as they need to pay what they owe. This issue briefing sets out information about the loan charge and explains how HMRC will help customers settle their disguised remuneration and/or loan charge liabilities.
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Updates to the tax avoidance list Published: 14 November 2023 Emailed: 15 November 2023
HM Revenue and Customs (HMRC) has updated the list of named tax avoidance schemes, promoters, enablers and suppliers.
HMRC has published the details of four more tax avoidance schemes that are subject to a stop notice. The most recent update was on 10 November 2023 with amendments to the entry for stop notice 12 and the addition of stop notices 13, 14 and 15. The list of tax avoidance schemes subject to a Stop Notice is also accessible, here. ‘ HMRC issue briefing: settling disguised remuneration scheme use and/or paying the loan charge ’ is published on GOV.UK. This briefing provides information about disguised remuneration avoidance schemes and how people can settle their use of them and/or pay the loan charge that has been introduced to tackle their use.
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Updates to the tax avoidance list Published: 7 December 2023 Emailed: 13 December 2023
HM Revenue and Customs (HMRC) has updated the list of named tax avoidance schemes, promoters, enablers and suppliers.
Purple Pay Limited have been added and a stop notice issued and published now the appeal period has concluded. Stop notice 16, issued on 7 December 2023 provides the following details, illustrating the scheme and how it operated.
Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice
1. The arrangement begins with an individual (‘the User’) holding a contract, or about to start a contract, with an end client (‘the End User’) or a Recruitment Agency (the ‘Agency’). The User becomes an employee of Company X who acts as the User’s employer and provides the User’s services to the End User.
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