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HMRC has published new spotlight 55 to alert taxpayers that umbrella companies marketed on comparison and broker websites are not always tax compliant. It urges potential users to check whether the umbrella company is legitimate. For example, they should find out if it has a company name, postal address and company registration number.
In addition, taxpayers should ask for a full and transparent breakdown of all deductions the company will take from their salary to make sure they pay the correct income tax and National Insurance contributions.
The department states taxpayers should obtain professional advice if they are not sure whether an umbrella company is compliant. It adds that HMRC cannot advise whether a broker website is promoting a legitimate umbrella company.
