The Chartered Institute of Payroll Professionals
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Payroll services can be a key financial service that could be targeted by such activity. In the warning document, issued jointly with other agencies, 14 red flags are identified. Note that activity showing a red flag does not necessarily indicate illegal activity is taking place but can raise suspicions and prompt to investigate further. The 14 flags identified are: 1. Transactions related to payments for goods on the Common High Priority list, from a company incorporated after 24 February 2022 and based in known diversionary destinations. 2. A customer who lacks or refuses to provide details on banks, shippers, or third parties, including about end users, intended end-use, or company ownership. 3. Transactions involving smaller value payments, all from the same end user’s foreign bank account, to multiple, similar suppliers of Common High Priority list items. 4. A customer that significantly overpays for a Common High Priority list item, compared to known market prices. 5. Purchases under a letter of credit that are consigned to the issuing bank, not to the actual end user. In addition, supporting documents, such as a commercial invoice, do not list the actual end-user. 6. Transactions involving entities with little to no web presence, such as a website or a domainbased email account. 7. Transactions involving customers with phone numbers with country codes that do not match the destination country. 8. The item or service (commodity, software, service or technology) does not fit the purchaser’s line of business. 9. The customer’s name or its address is similar to one of the parties on the OFSI consolidated list. 10. Transactions involve a purported civil end-user, but research indicates customers with counterparties with connections with the military, such as an address that is a military facility or is co-located with military facilities in a country of concern. 11. Transactions involving companies that are physically co-located, or have shared ownership, with an entity on the OFSI consolidated list. 12. Transactions that use open accounts/open lines of credit when the payment services are conducted in conjunction with known diversionary destinations. 13. Transactions involving a last-minute change in payment routing that was previously scheduled from a country of concern, but now routed through a different country or company. 14. Transactions involving payments being made from entities located at known transhipment points or involve atypical shipping routes to reach a destination.
The NCA are on hand to assist if you have any specific queries about a situation.
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Updates to the tax avoidance list Published: 29 January 2024 Emailed: 31 January 2024
HM Revenue and Customs (HMRC) has added a new name to the current list of named tax avoidance schemes, promoters, enablers and suppliers.
The most recent update was on 25 January 2024 with the addition of Purity Ltd.
HMRC has provided additional information regarding its interpretation of the scheme and how it works:
“Purity Ltd (‘Purity’) employees provide their services to an end client via a recruitment agency. The recruitment agency pays Purity for the work done by the employees. Purity then makes two payments to the employees. The first payment, a salary at the Na tional Minimum Wage or National Living Wage rate, described on bank statements as ‘Purity Salary’ is made with Income Tax and National Insurance contributions (NICs) deducted. The second payment, described on bank statements as ‘Purity Adv’ is made without Income Tax and NICs deducted. “HMRC’s position is that the untaxed payment described on bank statements as ‘Purity Adv’ is normal income, and Income Tax and NICs are payable on it. HMRC have previously published information about the tax avoidance arrangements used by some umbrella companies Spotlight 60 HMRC are aware that some Umbrella Companies operate more than one scheme, for example, a standard compliant scheme and a non-compliant scheme. HMRC advise employees of Purity to familiarise themselves with the guidance and to satisfy themselves that the correct amount of tax is being deducted on their income.”
It is important to spread awareness of these schemes and to not get caught up in them. But, if you think you are involved in one, or know of someone who is, you can contact HMRC for assistance and guidance.
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