If you’re a contractor, agency worker, or work through an umbrella company, check how you’re paid to make sure you’re not involved in tax avoidance.

Find out how to spot the signs, report avoidance, or get help leaving or reporting a tax avoidance scheme.

What is tax avoidance?

Tax avoidance is when people bend the rules of the tax system to try to pay less tax than they should.

Spotting tax avoidance is straightforward, even though you might think it is difficult to spot, or that you need to be an expert.

Read our quick guide to spotting signs of tax avoidance and how to protect yourself from them.

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, so you do not get 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 check whether your current contract could involve tax avoidance.

Avoidance schemes to steer clear of

You can check a list of tax avoidance schemes named by HMRC. If you are involved in any of the tax avoidance schemes shown on the list you should contact HMRC as soon as possible. This is not a complete list of all tax avoidance schemes currently being marketed.

If a tax avoidance scheme is not shown in the list, this does not mean that the scheme works or is in any way approved by HMRC.

The consequences of tax avoidance are real and potentially serious. Explore Tanya and Duncan’s stories about how they have been affected by getting caught up in tax avoidance.


Umbrella companies - understand how they work

If you’re a contractor, you might be employed through an ‘umbrella company’. Some umbrella companies try to break the tax rules.

It’s worth understanding how umbrella companies work, as you may be at risk.

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

Personal stories

If you enter a tax avoidance scheme, you take on all of the risk. That is because each of us is responsible under UK law for paying the correct amount of tax. This even applies if you have appointed someone else to deal with your affairs, or if you 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. That is on top of any fees that you’ve paid the person who sold you the scheme.

Some contractors who were caught up in tax avoidance schemes have asked us to share their personal stories as a warning to others. They were promised higher take-home pay, lower tax bills and less paperwork. Instead, it cost them time, money and stress.

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.


Duncan's story

Duncan is an IT project manager. He chose to use an umbrella company to help him manage his payroll admin, but ended up in a tax avoidance scheme.

Get help

If you think you might be involved in a tax avoidance scheme you should contact us as quickly as possible. We’ll help you get out of it and help you settle your tax affairs. The longer you leave it the bigger the tax bill.

Our job is to help get you back on the right track. We won’t be judgemental and if you can’t afford to pay everything in one go, we may be able to offer you an instalment arrangement.

Email us at counteravoidancecampaign@hmrc.gov.uk. For further information read Tax avoidance: getting out of an avoidance scheme.


You can also contact 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 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’ in the ‘Other information’ section.

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

Further information

HMRC has published several resources and guidance on tax avoidance:


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