Taxman tells contractors that only four new tax avoidance schemes needed avoiding in Q2

Only four new tax avoidance schemes were red-flagged by HMRC between early April and mid-June 2026, as arrangements that contractors should avoid or withdraw from using.

Added to HMRC’s “Current list of tax avoidance schemes, promoters, enablers and suppliers,” the four are Wiz Systems Ltd, Atlas Outflows Ltd, Pay Point Services Ltd and Arka Wealth OU Ltd.

Two schemes, Engaged Ltd and Revolve Ltd (both incorporated in the Isle of Man), had their details updated by HMRC during the same period (April 8th–June 19th).

How many new tax avoidance schemes in Q2?

But only four tax avoidance schemes being freshly blacklisted in over two months belies the sheer scale of abusive arrangements targeting contractors, experts signalled to ContractorUK.

David Harmer, of Markel Tax, says: “It would be optimistic to think that the falling number of reported schemes published by HMRC is because tax avoidance schemes are on the decline.

“Of the four new ones added, three of those appear to be variations on age-old employee loan schemes, and this is also true of the two that have seen updates”.

How many tax avoidance schemes were named and shamed in May 2026?

Harmer added that a cynic might conclude that not as much ‘naming and shaming’ (no schemes at all were blacklisted in May 2026) owes to an “overstretched” HMRC changing tack in the wake of JSL.

Markel Tax’s director of contractor solutions, he told ContractorUK: “Since April 6th 2026, Joint and Several Liability (JSL) has placed the burden on taxpayers to carry out stricter ‘due diligence.’

“Given that this due diligence is on employed supply chains, a cynical take would be that HMRC has diverted its resources away from tackling employee avoidance schemes.”

What is Clarity Umbrella’s reaction to JSL legislation for umbrella companies?

Yesterday, Clarity Umbrella described the JSL legislation as a “sledgehammer” dropped on the contractor umbrella company industry by HMRC for 2026/27.

But Clarity’s boss, Lucy Smith, said JSL’s “knee-jerk reactions” such as “PSLs being narrowed beyond belief, thereby restricting contractors’ choices,” are not why HMRC’s ‘historical’ list of tax avoiders is updating less.

Have contractor tax avoidance schemes disappeared?

“So have contractor tax avoidance schemes gone away? Despite the indication from HMRC’s list, which is more a historical record of schemes rather than a ‘live’ feed, I would suggest not,” she said.

“Avoidance scheme promoters and operators probably feel a bit hurt right now. But there are always those looking to dodge ‘the HMRC way,’ as indicated by its May 13th Bills of Exchange alert.”

Clarity’s managing director, Smith wondered to ContractorUK whether only four new schemes being blacklisted in two months is a sign HMRC is a “little tied up.”

She said that, as well as JSL, which “HMRC will want to see do its job, also now in play” is the Fair Work Agency (FWA).

When did the Fair Work Agency begin?

Operational since April 7th 2026, the FWA is working with HMRC to absorb its National Minimum Wage unit.

The head of employment taxes at Claritas Tax, Minesh Trivedi, indirectly gave credit to Smith adding that, as far as a resource-stretched HMRC is concerned, the FWA is an “additional pressure”

Are questionable tax avoidance schemes still popping up?

Also a partner at Claritas Tax, Trivedi yesterday told ContractorUK: “We’re still coming across clients who have either implemented or are considering implementing questionable schemes that promoters do not consider to be disclosable, relating to the labour supply chain.

“The main issue, we believe, is that HMRC does not appear to have adequate resources to be able to really challenge the effectiveness of such schemes. And so they continue to operate under…HMRC’s radar.”

What does HMRC say about JSL and tax avoidance?

Previously, HMRC has stated that the new umbrella companies legislation does not affect its approach to publishing the details of tax avoidance schemes.

The Revenue also pointed out (albeit this week, and for the purposes of this article) that the number of tax avoidance schemes identified on its formal list has always varied from month to month.

Tax expert David Harmer thinks that HMRC’s previous assertion — that JSL and the ‘naughty list’ are separate — is doing itself a disservice, as in time the former should deliver for the latter.

“The introduction of the JSL legislation was only this year,” the Markel Tax director began. “But the ‘self-policing’ nature of it is likely to mean any schemes outfoxing the list may be brought out in the wash from the compliance activities of those engaging umbrellas and other employment structures.”

What new powers does JSL give HMRC?

Claritas Tax partner Minesh Trivedi also sees an interaction between the two HMRC prongs targeting tax non-compliance.

He told ContractorUK: “The ‘joint and several’ provisions now give HMRC much more power to tackle some of these schemes. But the big question is whether HMRC will have enough resource to be able enforce the new powers.

“The key driver for companies considering such schemes appears to be cost savings. But with the new [Chapter 11 ITEPA] provisions, it may end up costing them a lot more in the long run, both in terms of time and money”.

How are tax avoidance schemes being described?

Other than newly blacklisting only four schemes in Q2, the HMRC list of tax avoidance companies was notable between early April and mid-June 2026 for the language used about the arrangements.

People Group Services said in a post that “many” of the blacklisted schemes do not succeed (rather than ‘all’ of the schemes).

Also taking to social media about the ‘named and shamed,’ Heather Self, corporate tax partner at Blick Rothenberg, described the schemes as “mostly” hopeless (rather than ‘entirely’ hopeless).

Does HMRC say that every tax avoidance scheme is a failure?

When asked by ContractorUK, HMRC seemed to maintain that, despite being included on its list of arrangements to avoid or withdraw from, not every single scheme can be said to be universally non-compliant.

Potentially with the courts in mind, an HMRC spokesperson said: “Tax avoidance schemes are cynically marketed as clever ways to pay less tax. The truth is, they rarely work.”

Does HMRC always catch up with EVERY avoidance scheme?

There appears to be a similar reluctance to assert that non-compliant tax schemes are guaranteed repercussions from the Revenue. 

People Group Services said: “HMRC nearly always catches up [with them] and when they do, the consequences can be costly. Those involved often end up paying far more than they expected, with hefty penalties on top.”

What do tax avoidance scheme promoters rely on?

Meanwhile, Blick Rothenberg’s Ms Self warned that tax avoidance scheme sellers rely on the buyers “not understanding” that the arrangements will “probably” go wrong, and that they will be left with tax to pay as well as fees to the seller.

Responding to questions from ContractorUK, the HMRC spokesperson warned:  “It is the users [of schemes] that can end up with unexpected tax bills. We would urge anyone who thinks they have entered these schemes to contact us as soon as possible to get help.”