Tax avoidance – don't get caught out

If you’re a contractor, agency worker, or work through an umbrella company, we can help you 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.

Some people try to bend the rules of the tax system to pay less tax than they should.

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.

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 current contracts could involve tax avoidance.

We can help you. Check our list of tax avoidance schemes that we’ve named. If you are involved in any of the tax avoidance schemes shown on the list you should contact us as soon as possible.

Please remember, 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 impact of tax avoidance is real and potentially serious. Explore Tanya and Duncan’s stories about how they have been affected by getting caught up in tax avoidance.

If you’re a contractor, you may be employed through an ‘umbrella company’. However, 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.

Everyone is responsible under UK law for paying the correct amount of tax. Even if you’ve appointed 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.

But we’re here to help you. Some contractors who were caught up in tax avoidance schemes have asked us to share their personal stories. They were promised higher take-home pay, lower tax bills and less paperwork. Instead, it cost them time, money and stress. Look at their stories so you can learn from their mistakes.

If you think you might be involved in a tax avoidance scheme please contact 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 issue is not the answer. Sadly, 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 we need. Plus, if you can’t afford to pay everything in one go, we may be able to offer you an instalment arrangement.

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’ 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.

HMRC has published several resources and guidance on tax avoidance:

• Guidance on how to identify schemes that wrongly claim to increase your take-home pay if you are a contractor or agency worker
• Ten things a promoter of tax avoidance schemes will not always tell you – guidance to help you think about the risks of taking up a tax avoidance scheme that a promoter or enabler may be concealing
• Guidance on employment status, and what is meant by the term ‘contractor’
• Spotlight 60 – find out about the tax avoidance arrangements used by some umbrella companies
• Spotlight 54 – a guide on tax avoidance schemes targeting returning NHS workers during the COVID-19 pandemic
• Spotlight 55 – find out what you should consider before using an umbrella company to make sure it complies with the tax rules
• HMRC’s standards for agents – all paid agents and advisers, whether UK based or overseas, are expected to meet these standards

We want to hear your views about the information on this page, and on GOV.UK, so we can improve the quality and relevance of the information we provide in future.

Protect yourself from scams

• check how to identify HMRC-related scam phone calls, emails and text messages
• find out how to report tax scams
• follow the National Cyber Security Centre’s six essential steps to keeping secure and safe online at CyberAware.gov.uk
• if you believe you have fallen victim to a scam, contact Action Fraud