HMRC highlights tax avoidance issues

Date: 1st September 2011

High-earning contractors around the UK that are tempted to make use of various tax avoidance schemes have been issued with advice by HM Revenue & Customs (HMRC).

The department has used the latest issue of its Spotlight publication to announce that it is aware of new schemes, that seek to avoid Income Tax and National Insurance contributions (NICs), are being advertised to contractors, highly-paid employees and individuals working through recruitment agencies.

According to the advertisers, these schemes help workers get around new disguised remuneration rules.

"Arrangements may involve payments passing through a series of companies, loans from a third party or an offshore alleged employer, a deed of covenant, secondments from one employer company to another or claims of self employment," HMRC explained.

"In HMRC's opinion these arrangements do not succeed in avoiding the tax and NICs due. HMRC will challenge these arrangements and litigate where necessary to recover unpaid tax and NICs."

Posted by Emily Smith