If you are employed in the UK, you will have a tax code. Tax codes tell employers and employees how much tax should be taken out of a pay packet before it goes to the employee.
Tax charities TaxAid and the Low Incomes Tax Reform Group (LITRG) have expressed concern about the number of ‘umbrella’ workers being pushed into tax avoidance schemes without their knowledge.
Speaking to the FT, the charities said that more and more workers were getting in touch to complain about non-compliant umbrella companies.
LITRG said some unscrupulous umbrella companies were failing to deduct tax on wages, effectively paying workers via ‘disguised renumeration’, which is banned by HMRC. Affected workers included agency nurses and supply teachers.