Remuneration arrangements not above suspicion

HMRC published information under FA 2022 s 86(1) that the activities of the taxpayer were mainly done to enable others to obtain a tax advantage – specifically its contracted workers received their remuneration free of tax and National Insurance.

Payeworx provided the services of workers to third parties. Each worker had to set up a personal service company (PSC). A director of the company said that workers received a salary on which PAYE was operated and then paid a dividend to each worker’s PSC.

The company said it was ‘arguably irrational’ for HMRC to suspect that there was a tax advantage in the arrangements. Their main purpose was to create a situation where the third party clients would not have to make status determinations under the IR35 regime. The fact that HMRC did not like the arrangements and considered them to be a ‘bit hinky’ was not sufficient reason...