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HMRC have added another scheme to the Spotlights section of their website, which highlights avoidance arrangements that they believe do not work.
The latest is Spotlight 12, ‘Taxing the rewards for work carried out for a UK-based employer’.
HMRC are aware that new schemes aiming to avoid income tax and National Insurance are being advertised to contractors, highly paid employees and those using recruitment agencies. It is claimed that these schemes circumvent the new disguised remuneration rules.
Such arrangements may involve payments passing through a series of companies, loans from a third party or an offshore alleged employer, a deed of covenant, secondments from one employer company to another or claims of self-employment, etc.
In HMRC’s view these arrangements do not succeed and they will challenge them, litigating where necessary.
