So we know that HMRC finally caught up on the mini umbrella's, but it seems as soon as the crackdown started, some individuals were already onto their next scam and this time it is even harder to spot.
This time, there are a number of individual companies offering PAYE Umbrella, all somehow interlinked, doing exactly as they should, taking deductions and paying their HMRC bills, however they are now claiming that they didn't realise they were entitled to the £5k employment allowance. At this point HMRC issue a tax credit for the supposed overpayment, the company is then sold and so the chain continues. Each company in the pyramid being sold on, and sold with the tax credits, until it reaches the top company which then has enough tax credits to not have to pay an HMRC bill pocketing the monies.
The interesting part is that there is no such list of companies being sold with tax credits attached, so the individuals involved must know each business is up for sale with the credits!
Whether this causes any immediate risk to the contractors is unknown, either way this is blatant fraud and very difficult to track, so do keep an eye on any businesses you choose to engage with at this time.
This time, there are a number of individual companies offering PAYE Umbrella, all somehow interlinked, doing exactly as they should, taking deductions and paying their HMRC bills, however they are now claiming that they didn't realise they were entitled to the £5k employment allowance. At this point HMRC issue a tax credit for the supposed overpayment, the company is then sold and so the chain continues. Each company in the pyramid being sold on, and sold with the tax credits, until it reaches the top company which then has enough tax credits to not have to pay an HMRC bill pocketing the monies.
The interesting part is that there is no such list of companies being sold with tax credits attached, so the individuals involved must know each business is up for sale with the credits!
Whether this causes any immediate risk to the contractors is unknown, either way this is blatant fraud and very difficult to track, so do keep an eye on any businesses you choose to engage with at this time.
