Reply to: BEWARE Umbrella companies bring cloned for tax avoidance purposes!

[cojak]

More info from HMRC

Spot the signs of tax avoidance - GOV.UK (www.gov.uk)

[eek]

No but it would be a start!

If you want a job done properly - you do it yourself

[lucyclarityumbrella]

No but it would be a start!

[eek]

And still no budget allocated for regulation

I really don't know why anyone in your industry was expecting there to be anything in the budget.

Regulation won't fix the problems that need to be fixed and especially wouldn't fix any of the problems that the industry seems to think it would magically fix...

[lucyclarityumbrella]

And still no budget allocated for regulation

[eek]

They are cloning documents too - so the agencies need to be very careful too as it may only be a slight, what looks like typo, in the name, then a change of bank details.

But that could be very easily fixed by say a known trusted resource listing the last few digits of the umbrella's sortcode and account No...

[lucyclarityumbrella]

It's probably the case that the current attempt for schemes to pass themselves off as legitimate umbrella firms because agencies are becoming more careful regarding who they deal with and abusing a name may allow them to pass the checks of less careful agencies.

They are cloning documents too - so the agencies need to be very careful too as it may only be a slight, what looks like typo, in the name, then a change of bank details.

[eek]

Absolutely correct. As an aside, the major job platforms are promoting tax avoidance schemes in their banner ads. I did make complaints to a couple of the very well known oil and gas job advert websites about them promoting shady tax avoidance schemes. But my complaints fell on deaf ears.

When someone naively clicks through the banner ads to the schemes, the job advert websites in my opinion are giving some legitimacy to the scheme operators. I don't know what can be done because there's too many vested financial interests at play all taking their cut.

The reality is that any agency caught promoting / paying via a scheme (Mini Umbrella Company (MUC) schemes are the best example but others are available) the end result will be HMRC seeking the lost tax back from the agency.

In the case of using a Mini Umbrella firm the immediate impact for the agency is on VAT as the deduction of VAT paid to the MUC will be disallowed and HMRC will seek the VAT from the agency.

It's probably the case that the current attempt for schemes to pass themselves off as legitimate umbrella firms because agencies are becoming more careful regarding who they deal with and abusing a name may allow them to pass the checks of less careful agencies.

[Fred Bloggs]

Nuances because people are aiming to cheat the law? Complications because in general people are not educated about tax law, or even how it works, much less that it is not susceptible to interpretation or manipulation beyond the legal boundaries. Not helped by Brown's messing about with tax credits (aka give me all your money and I may give some of it back to you to spend) and the total confusion over acceptable and unacceptable avoidance

Marketing has to be honest, legally. Saying you can return a significantly greater percentage than anyone else is dishonest. HMRC aren't going to start telling the truth, since that will spoil their own little party, Until DBERR and the ASA take action, however, the problem will persist.

Absolutely correct. As an aside, the major job platforms are promoting tax avoidance schemes in their banner ads. I did make complaints to a couple of the very well known oil and gas job advert websites about them promoting shady tax avoidance schemes. But my complaints fell on deaf ears.

When someone naively clicks through the banner ads to the schemes, the job advert websites in my opinion are giving some legitimacy to the scheme operators. I don't know what can be done because there's too many vested financial interests at play all taking their cut.

[malvolio]

Yep - but it's hard to actually work out what to tell people when some FCSA umbrellas still use phrases like "maximising your income".

The reality is that there is a need for an education advertising scheme that goes

1) You (and only you, not your agency, not your employer, not your umbrella) are responsible for the tax on your income.
2) HMRC have details from your agency telling them exactly how much they've paid you - and will notice the difference.

The problem is that you can't say that without someone objecting to it for marketing reasons, and there are nuances in the above that get complex incredibly quickly.

Nuances because people are aiming to cheat the law? Complications because in general people are not educated about tax law, or even how it works, much less that it is not susceptible to interpretation or manipulation beyond the legal boundaries. Not helped by Brown's messing about with tax credits (aka give me all your money and I may give some of it back to you to spend) and the total confusion over acceptable and unacceptable avoidance

Marketing has to be honest, legally. Saying you can return a significantly greater percentage than anyone else is dishonest. HMRC aren't going to start telling the truth, since that will spoil their own little party, Until DBERR and the ASA take action, however, the problem will persist.

[eek]

Well...... I am (almost) speechless at this. After everything that has been going on for well over a decade, schemes are still being offered and people are still signing up for them? Being honest, I had not a massive amount of sympathy the first time around. Anyone who signs up today deserves everything that's coming to them, frankly.

Yep - but it's hard to actually work out what to tell people when some FCSA umbrellas still use phrases like "maximising your income".

The reality is that there is a need for an education advertising scheme that goes

1) You (and only you, not your agency, not your employer, not your umbrella) are responsible for the tax on your income.
2) HMRC have details from your agency telling them exactly how much they've paid you - and will notice the difference.

The problem is that you can't say that without someone objecting to it for marketing reasons, and there are nuances in the above that get complex incredibly quickly.

[Fred Bloggs]

Well...... I am (almost) speechless at this. After everything that has been going on for well over a decade, schemes are still being offered and people are still signing up for them? Being honest, I had not a massive amount of sympathy the first time around. Anyone who signs up today deserves everything that's coming to them, frankly.

[eek]

And the bits Lucy forgot to add

1) No scheme has worked since about 2009 - no-one has suddenly found a means of legitimately avoiding tax
2) Saving money now won't save you money long term. If you use a scheme, HMRC will demand any unpaid money plus interest plus FINES

You are responsible for your tax bill - so any shortcuts / underpayments now would be found out and just come back to haunt you...

Remember agencies submit how much they have paid for your work. If your PAYE tax account doesn't match what the agency reports, the first person HMRC will ask to fix the issue will be you by presenting a large bill while expecting immediate (30 days) payment.

As for checking whether a company is legitimate -
1) the FCSA and Professional Passport list the phone number of their members there - use them to find the umbrella's phone number and call them.
2) there isn't the money within an umbrella firm to cold call people directly. The only time an umbrella firm is going to call people is if you've got a new contract and the agency is proactive and notifies the umbrellas on their PSL list. That's so unlikely it's not going to happen.

[NotAllThere]

Stuck.

[lucyclarityumbrella]

It would also be really helpful if anyone comes across any new clones to post it on here too! Anything to keep people aware