HMRC’s online record of avoidance companies ‘akin to a naughty list’

The longest list yet of avoidance schemes which HMRC says contractors should avoid has emerged, with almost 50 operators named.

But in a sign the online resource might not necessarily command the seriousness that the Revenue wants, one firm derided it as a “naughty list.”

The firm, payme, acknowledged that the list is actually HMRC’s official rundown of “named and shamed” avoidance providers and promoters.  

'Tip of the iceberg'

“However, with over 500 umbrella companies operating in the UK, compliant companies [like us] are concerned the list is just the tip of the iceberg,” payme said.

Expanding on its reservations, the firm reminded that once a company has been added to the avoidance list, HMRC is legally required to remove it after 12 months.

“[The company] is [therefore] free to continue to act in an unscrupulous manner until the next time its conduct is drawn to the attention of the taxman,” the firm reflected.

“It’s a recurring loop, and many unwary contractors have been drawn into non-compliant arrangements that eventually focus HMRC’s attention on them.”

'Be careful contractors'

Reflecting on the latest update to the list, made by HMRC on June 28th, IWORK boss Julia Kermode echoed the alert to independent and temporary professionals.

“If you are a contractor, please be careful when choosing an umbrella to pay you,” she says.

“There are lots more schemes out there than those on HMRC's list, and remember that HMRC's list is never fully comprehensive”.

'Peak PAYE Ltd'

According to HMRC, it has just added five firms offering avoidance to avoid – Bluemoore Associates Ltd, Resource Hubco Ltd, PAYE Services Ltd, Compliant Pay Ltd/Ultimate Planning Ltd.

It also claims that the June 28th update saw Peak PAYE Ltd added – and advisers using LinkedIn said as much in their posts, but Peak PAYE Ltd was initially added in June 2022.

If anything, Peak PAYE is about to drop off the list, given that entries from July 2022 got deleted in the update as its 12-months is up, observes Kermode, the CEO at Payepass.

'Schemes dressed up as umbrella companies'

But twice mentioning a company whose offerings could land its contractor-clients a hefty HMRC bill is no bad thing, Qdos CEO Seb Maley has signalled.

“The more done to put a stop to these schemes, the better,” he said.

“Tax avoidance schemes dressed up as umbrella companies are commonplace and they pose a huge threat to individuals working through them.”

'Reference'

Departing a bit from its “naughty list” jibe, payme said: “The list is a good thing to reference when considering an umbrella company. [But] there’s more to making that choice.”

In a nod to the need to reference, ContractorUK readers have now created a thread recording the names of all companies placed on HMRC’s blacklist, featuring both expired and current entries.