Tax Rebates & Refunds

HMRC warns contractors away from tax avoidance schemes

August 27, 2011
Posted in Income Tax — Written by Jennifer

In one of its latest ‘Spotlight’ reports, HM Revenue and Customs (HMRC) has warned contractors, those using recruitment agencies and other highly paid employees to avoid any advertised schemes that may lead them to avoid paying tax or National Insurance contributions (NIC).

The report states that these schemes claim to get around new disguised rules regarding remuneration, but in actual fact, HMRC may view people who have used them as avoiding their tax responsibilities.

According to the report:

“Arrangements may involve payments passing through a series of companies, loans from a third party or an offshore alleged employer, a deed of covenant, secondments from one employer company to another or claims of self employment, etc. In HMRC’s opinion these arrangements do not succeed in avoiding the tax and NICs due. HMRC will challenge these arrangements and litigate where necessary to recover unpaid tax and NICs.”

Provided contractors and other types of employees meet their tax responsibilities properly, without using any of these schemes, they may even be entitled to claim for tax rebates at a later date. Contractors, in particular, may be able to claim rebates for tools and equipment they need for their work.

No Comments (Leave comment »)

No comments yet.

Comment RSS | TrackBack URL

Leave a comment