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Tax advice - don’t get caught out

Tax avoidance

We’ll help you understand your pay arrangements so you don’t get any unexpected tax bills.

If you’re looking to work through an umbrella company or already do, we’ll help you to understand pay arrangements and how to check your pay so you don’t get caught out. 
 
We’re also here to help you leave and report a tax avoidance scheme, so you can get back on track and help protect others. 

Spotting tax avoidance

Get out of a tax avoidance scheme

Check your umbrella company

Report a tax avoidance scheme

Spotting tax avoidance

With our support, spotting tax avoidance is straightforward. You may think it is difficult to spot, or that you need to be an expert. We can show you how to protect yourself from tax avoidance schemes. 

Tax avoidance usually involves artificial transactions that serve no real purpose other than to falsely claim to reduce tax. 

If you have been in a tax avoidance scheme, you’ll have to pay the tax that is legally due, plus interest. Unfortunately, this is all on top of any fees you’ve already paid the person who sold you the scheme. 

You can read our quick guide to spotting signs of tax avoidance.

Check your pay

Understanding how you’re being paid is the best way to make sure you don’t get caught up in tax avoidance. This applies to people in PAYE as well as Self Assessment.

Checking your payslips and contractual arrangements will help you confirm you are paying the right amount of Income Tax and National Insurance contributions. Doing this will mean you avoid getting an unexpected tax bill later.

Things to look out for include:

  • receiving more money in your bank account than what is shown on your payslip
  • receiving untaxed payments like loans or capital advances

The money you receive in your bank account should match the net pay on your payslip. To understand more about what your payslip should look like, read our payslip guide.

You can also use this risk checker to spot whether any of your contracts could involve tax avoidance.

Personal stories

Everyone is responsible under UK law for paying the correct amount of tax. Even if you appoint someone else to deal with your affairs and are given bad advice. If you are found using a tax avoidance scheme, you’ll have to pay the tax that is legally due, plus interest. And you may have to pay a penalty. Unfortunately, this is all on top of any fees you’ve already paid the person who sold you the scheme.

Chantelle’s story

Chantelle, a nurse from Watford, was caught out by a tax avoidance scheme. She became concerned that some of her pay from a new agency job was being paid into her bank account with no tax taken, so she contacted HMRC for help. 

Read Chantelle’s story on GOV.UK.

Read a transcript of Chantelle’s video
Chantelle, a nurse in Watford, was caught out by tax avoidance. Here’s what happened. “I saw an advert for some agency work and they said they were approved by HMRC, so I felt safe signing up with them.” A few months later, Chantelle noticed that tax wasn’t being taken off some of her pay. She’d seen the ‘don’t get caught out’ tax avoidance campaign so knew to email HMRC to check her payslips. “They said I joined a tax avoidance scheme, and told me what I needed to do to leave it.” Chantelle acted quickly. HMRC were able to work with her to settle the tax due. “I felt betrayed by the agency, and I’m sure there are other people in the same situation. We work so hard only to become victims of these schemes.” If you work through an agency like Chantelle, always check your payslips. And if something doesn’t look right, contact HMRC straight away.

Tanya’s story

Tanya is a single parent and a nurse. She was encouraged to get into a tax avoidance scheme, which left her with a large and unexpected tax bill.

Read Tanya’s story on GOV.UK.

Read a transcript of Tanya’s video
As a nurse, I trust my patients and they trust me. It’s a relationship of care. I found the job through an agency and when they recommended an umbrella company for payroll services, I thought it was fine. I trusted the agency, I trusted the umbrella company, but they lied to me. I thought they’d take care of me but they didn’t. They told me not to worry and that they would take care of all my legal tax issues. They sold me the benefits of higher pay but this left me owing HMRC money. Then the umbrella company washed their hands of me. They disappeared and I’ve been left picking up the bill.

Duncan’s story

Duncan is an IT project manager. He chose to use an umbrella company to help him manage his payroll admin, without double-checking the details, and ended up in a tax avoidance scheme. 

Read Duncan’s story on GOV.UK.

Read a transcript of Duncan’s video
When I started working as an IT contractor I thought I’d use an umbrella company to manage my payroll. I did an online search for umbrella companies and I came across a comparison website. I just chose one of them and they got me set up and that was it. I had a couple of sleepless nights at the start. That was really the worst part. I spoke to someone at HMRC and that settled things down. Fortunately, I hadn’t spent all my money and had saved some of it. There was a painful tax bill but at that point I knew it was coming so I’d been able to prepare for it.

Get out of a tax avoidance scheme

If you think you might be involved in a tax avoidance scheme please get in touch with us as quickly as possible. We’ll support you. We can help you get out of the scheme and settle your tax affairs.

Ignoring the problem is not the answer. The longer you leave it the bigger the tax bill.

Our aim is to get you back on the right track. No judgement. Simply offer you the support you need. And if you can’t afford to pay everything in one go, we may be able to offer you an instalment arrangement.

For more information, read Tax avoidance: getting out of an avoidance scheme.

Check your umbrella company

Understanding how you’re being paid is the best way to make sure you aren’t using an umbrella company that is operating a tax avoidance scheme.

Checking your payslips and contractual arrangements will help you confirm you are paying the right amount of Income Tax and National Insurance.

You can use our work out pay from an umbrella company tool to calculate what your pay should be.

To understand more about what your payslip should look like, read our payslip guide.

Whether you already work through an umbrella company or are thinking of signing up, you should check the tax avoidance schemes we’ve named.

For more advice about umbrella companies: Read our guide to what it’s like to work though an umbrella company and how you’ll be paid.

Umbrella companies – understand how they work

If you’re a contractor, you may be employed through an ‘umbrella company’. If you’re not sure, it’s best to check as some umbrella companies try to break the tax rules.

You may be at risk. But if you understand how umbrella companies work, you can take steps to avoid these risks.

Read our guide to what it’s like to work through an umbrella company and how you’ll be paid.

Report a tax avoidance scheme

Get in touch with us if:

  • you have been encouraged to get into a tax avoidance scheme
  • you are aware of a tax avoidance scheme
  • you want to let us know about someone selling tax avoidance schemes
You can report a suspicious scheme to HMRC here

You can do it anonymously if you prefer – you do not have to give your name, address or email address. Please make sure you enter the code ‘TAC’ when you complete the form.

You can also phone HMRC on 0800 788 887 – if you’re outside the UK call +44 (0)203 0800 871.

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More information

We’ve got the following resources and guidance about tax avoidance: