The Chartered Institute of Payroll Professionals
News On Line
“Scheme users and their personal service companies ( PSCs) join and become members in Procorre LLP (Procorre). The PSC’s then enter into contracts to provide the services of the scheme users to end clients. The PSC’s invoices the end clients [on behalf of Proccore] and transfer the income received to Procorre. Procorre return the income to the PSC’s and the users after deducting a fee. The income is returned via direct payment to the PSC’s bank accounts, and in the form of untaxed drawings, pre-paid expense cards and business development fund payments all provided by Procorre .”
React Administration service Limited
“The scheme user enters an employment contract with React Administration Services Limited ( RASL) and provides their services to an end client. RASL then makes a single payment to the scheme user for their services, but this is artificially separated into two elements. The first element is a salary paid at or around National Minimum Wage or National Living Wage with tax and National Insurance contributions (NICs) deducted. The secondary element is described as a ‘propelled payment’ with no tax and NICs deduc ted.” HMRC has 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 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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