29th April 2024 Posted by - Alexander Accountancy
Don’t get caught out by tax avoidance
HM Revenue and Customs (HMRC) is running a campaign to help people avoid being caught out by tax avoidance schemes. This is particularly relevant to those who are contractors, agency workers or are working through an umbrella company.
Tax avoidance schemes are schemes designed to bend the rules of the tax system in a way that was not intended. They usually involve contrived transactions whose only real purpose is to artificially reduce the amount of tax someone pays. It is different from effective tax planning.
Being caught out by a tax avoidance scheme can be expensive. People who use them often end up paying interest and penalties in addition to the tax they should have paid. This is on top of the fees that may already have been paid to the person who sold the scheme.
Therefore, it makes sense to check your working arrangements and contract to make sure that you do not get caught up in a scheme that might land you a big tax bill somewhere down the line. This applies whether you are being considered as self-employed or employed.
Red flags include receiving more money in your bank account than what is shown on your payslip, or receiving untaxed payments that are described as loans or capital advances.
You should be especially careful if a scheme is described as ‘HMRC approved’ since HMRC does not approve schemes.
HMRC provides a risk checker tool that you can use to find out if your employment arrangements might involve tax avoidance. This can be accessed here: https://www.gov.uk/guidance/check-if-you-are-at-risk-of-tax-avoidance
We are expert tax advisers and can help you with effective tax planning, however, please be assured that we do not offer tax avoidance schemes. If you think that a tax avoidance scheme may have caught you out and would like some advice, please call us at 01283 743851 or click here to contact us and we will be happy to help you.
See: https://dontgetcaughtout.campaign.gov.uk/tax-avoidance/
