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Spotlight 71: Warning for agency workers and contractors who are moved between umbrella companies

HMRC has issued Spotlight 71 advising agency workers and contractors on identifying potential red flags when being moved between umbrella companies that may be operating non-compliant tax avoidance schemes.

The Spotlight advises agency workers and contractors that certain umbrella companies may promote arrangements that facilitate tax avoidance. It states that discrepancies such as modifications in PAYE references, unexpected changes to employer names, or altered payment structures may signal involvement in an avoidance scheme.

The guidance emphasizes that contracts, payslip information, salary payments, and associations with promoters known for tax avoidance should be carefully reviewed, with any concerns being raised initially with the umbrella company.

See Simon’s Taxes E4.1045A.