HMRC has named two tax avoidance schemes and their promoters for the first time, advising anyone involved to withdraw from them as soon as possible to prevent the build up of large tax bills.
Both schemes involve individuals working as contractors agreeing to an employment contract under which they are paid the National Minimum Wage (NMW). The balance of their wage is paid as a loan to try to avoid national insurance and income tax.
HMRC is letting taxpayers know as early as possible so they can steer clear of these schemes or exit them if they have already joined. This is the first time HMRC has used new powers to name tax avoidance schemes and their promoters as part of a campaign to warn the public not to get caught up in tax avoidance.
Mary Aiston, Director of Counter Avoidance at HMRC, said:
'These schemes are cynically marketed as clever ways to pay less tax. The truth is they rarely work in the way the promoters claim and it's the users that end up with big tax bills.
'New legal powers allow us to name promoters and the schemes they peddle much faster, and this announcement is just the first step. But we need the public to be vigilant, and that's why we're also helping people identify and steer clear of these schemes through our Tax Avoidance – Don't Get Caught Out campaign.'
Internet link: Tax Avoidance campaign website HMRC press release