The CIOT has responded to the Treasury’s call for evidence on the role that umbrella companies play in the labour market, and how they interact with the tax system. Key comments include:
The relatively small number of workers caught up in disguised remuneration avoidance schemes could increase, with a recent proliferation of workers engaged by umbrella companies. The UK government should adopt a targeted, robust, and proportionate response to combat such schemes.
The government should adequately resource HMRC so that it can tackle promoters and facilitators and levy appropriate sanctions against them.
HMRC could introduce a verification scheme (similar to that used in the construction industry) to help end-clients and temporary work agencies engage with tax-compliant umbrella companies –ensuring that workers paid through an umbrella company are employed by an entity known to HMRC.
HMRC should consider extending the PAYE transfer of debt provisions to target those who knowingly facilitate an umbrella company’s failure to properly account for PAYE and NIC on workers’ pay.
The CIOT has responded to the Treasury’s call for evidence on the role that umbrella companies play in the labour market, and how they interact with the tax system. Key comments include:
The relatively small number of workers caught up in disguised remuneration avoidance schemes could increase, with a recent proliferation of workers engaged by umbrella companies. The UK government should adopt a targeted, robust, and proportionate response to combat such schemes.
The government should adequately resource HMRC so that it can tackle promoters and facilitators and levy appropriate sanctions against them.
HMRC could introduce a verification scheme (similar to that used in the construction industry) to help end-clients and temporary work agencies engage with tax-compliant umbrella companies –ensuring that workers paid through an umbrella company are employed by an entity known to HMRC.
HMRC should consider extending the PAYE transfer of debt provisions to target those who knowingly facilitate an umbrella company’s failure to properly account for PAYE and NIC on workers’ pay.
