HMRC urges contractors to stop using Acquda; Balance Bay, On the Box Pay, Rosewood WM IO Services, RW Operations, Whitebridge Management and Your Paye

Seven new avoidance schemes that contractors should pull out from using have been added by HMRC to its online blacklist.

They are; Acquda, Balance Bay, On the Box Pay, Rosewood WM IO Services, RW Operations, Whitebridge Management and Your Paye.

The latter irritates Jim Smith who, as a contractor, is the prime target of the seven, as all are employment tax-related, observes BDO. 

“Is there any compliance taken seriously at Companies House to even get that company name registered?” Smith said of Your Paye.

'Common theme'

It’s not the name but its make-up, shared by the six others HMRC ‘blacklisted’ on Aug 8th, which stands out to John Chaplin of BDO.

“The common theme behind the arrangements is that they offer payment partly in tax free/low tax methods.

“So it usually [only] becomes clear [to contractors] when the first payment is received,” Chaplin, a partner at the accountancy and business advisory firm told ContractorUK.

'Little choice'

Chaplin says contractors sometimes get “little choice” but to work through the likes of the seven, if they want to secure work offered by an agency.

“It amazes me that these schemes still exist, when businesses are [meant to be] undertaking supply chain due diligence,” he said.  

“This tells me that the [level of] due diligence undertaken probably isn't sufficient.”

'Staying informed is the key'

From a contractor’s standpoint, “staying informed is the key to tax compliance,” said the FSCA, posting the names of the seven online.

This sort of ‘keeping you in the loop’ activity, as the Freelancer & Contractor Services Association called it, helps because visibility of the HMRC resource is in doubt.

As a freelance software developer Dave Carson put it, “Is this just another list?”-- or is HMRC actually “prosecuting these companies?”

'If in doubt...'

On the list, HMRC says it “strongly advises” any individual using a listed scheme, to “withdraw” and “settle your tax affairs to prevent building up a large tax bill.”

Asked for any guidance for contractors at risk of schemes, BDO’s Mr Chaplin told ContractorUK: “It’s really tricky to advise other than to say ‘If it seems too good to be true, then it almost definitely it is.’

“If in doubt, speak to HMRC and share what paperwork you’ve been given. If still unsure, find a new [provider] -- just as soon as you can."