Umbrella schemes Articles
HM Revenue and Customs has warned taxpayers that it is aware of a new ‘tax avoidance’ umbrella scheme in which contractors are paid, in part, with loyalty points that can be redeemed for ‘tax free’ income.
The tax authority has said that they consider the umbrella scheme to be against the rules of disguised remuneration and that users of the scheme will have their tax affairs investigated.
The government has issued a warning about agencies and umbrella companies that claim to be able to help you save on tax and boost your take home pay.
Although everything may look legitimate and above board, these companies actually run tax avoidance schemes that could land you with a bigger tax bill and penalties, HMRC said.
The ‘too good to be true’ schemes work in different ways, but operators usually promise to reduce your tax liability and help you keep more of your income.