These types of setups have contributed to thousands of its contractors across the UK Being Saddled With Life-CHANGING TAX BillsAnd the UK government is in the middle of a concerted push to reduce the prevalance of these continued salary payment mechanisms.
The consultations were announced during the spring statement 2025, With the first seeking views On Government Proposals to Tackle The Promoters and Enablers of Tax Avoidance Schemes, and how to better support customers who might be targeted by them.
“These include proposals that would give HMRC additional power and Stronger sanctions, allowing hmrc to more efficiently and effectively disrupt the business models promotors rely on,” Its consultation document.
HMRC is Inviting Members of the Public, Representative Bodies and Advisers to feedback on this consultation, which is due to run until 18 June 2025 before the results are published.
“A Persistent and Determined Group of Promoters of Tax Avoidance seek to exploit every options to harm the tax system by seling tax avoidance that they are the rules,” Document Continued.
“They cause harm to public finance and to the individuals that use the scheme they promote, who often end up with large large tax bills on top of the substANTIAL FEES Already Paid Out to the Government is determined to close this unacceptable behavior. “
Tax avoidance fronts
The government has previously committed to tackling the problem of non -compliant umberlla companies acting as fronts for tax avoidance schemes, who lure in contractors with “two Take-Home pay rates.
It plans to do this by making employment agencies Assume Responsibility for Ensuring The Correct Amount of Pay as You Earn (Paye) Contributions are paid by The labor supply chain.
This change was announced in the autumn budget 2024With the government stating that it expects the move to generate £ 895m in additional tax during 2026/27 financial year by making it harvest for umbrella companes in tax avoidance in tax avoidance Activities.
The second consultation is geared towards soliciting opinions on another set of hmrc proposals designed to strengthen the government tax collection agency's ability to take etc. Facilitate Non-Compliance from their clients.
“Most tax advisers in the uk are dedicated professionals who adhere to Rigorous Standards, Helping Millions of Taxpayers pay the right tax,” said the consultation document. “However, a minority of advisers Fall short of these standards.
Among The Proposals HMRC will be seeking feedback on are whether stranger penalties should be introduced against Against Rogue Tax Advisers, Including Publishing Details of Any SANCTIONS ARE BEENT Subjected to as a result of their non-compliant behavior.
HMRC is also Mulling Over Whether to Alert Professional Bodies these Advisers Might Bee Members to Any Suspect Behavior They Might Be Dabbling in.
HMRC said it would be particularly interested in his End on 7 May 2025.
The spring statement also Saw Chancellor Rachel Reeves Outline Plans to use artificial intelligence (ai) technology to close a £ 500m tax gap caused by wealthy peeple making use Off-shore tax schemes.
As reported by computer weeklyThis work will involve recruiting experts in Private Sector Wealth Management, and Deploying Ai and Advanced Analytics to Help Identtify and Challenge those who try to hide their wealth.
On the topic of the consultations, crawford temple, CEO of Independent Payment Intermediary Compliance Assessor Professional Passport, said they are “well intended” well intended Had tapped into the data it alredy has about these schemes earlier.
“HMRC is sitting on a goldmine of data that would have crushed tax avoidance schemes years ago, Yet they've chion to twenty their thumbs,” He said. “By Failing to cross-Reference intermediary reports and real-time payroll data, HMRC has effectively created a playground for tax avoiders.
“Their reactive approval has been cost workers and the treasury billions in the last reverene. Widespread compliance crisis, and the economy is suffering as a result.
“For years, HMRC have watched non -comcombreliant umberllas flourish while launching couing yet more consultations,” said temple. “Every moment of Hesitation is an invitation for tax dodgers to thrive. The time for analysis is over – the time for action is now.”