The most recent action to help protect the public has named tax avoidance bosses for the first time.
To warn clients to leave the firms' schemes or face hefty tax liabilities, HM Revenue and Customs (HMRC) has publicly named the directors of businesses that promote tax avoidance. The tax evasion promoter Saxonside Ltd’s director is Adam Fathers, while Stuart John Brooke is the brains behind tax evasion promoter The Umbrella Agency Ltd.
The public will be warned to avoid any avoidance strategies marketed by other firms with the same directors if the directors behind these schemes are identified. According to Mary Aiston, director of counter avoidance at HMRC, identifying the individuals behind tax avoidance schemes is an essential step in assisting clients in avoiding the existing and upcoming schemes they promote.
For the first time, The Umbrella Agency Ltd. and its director have been made public. Users of both schemes have been urged to cancel their participation or face receiving significant tax liabilities after HMRC revealed the director of the previously mentioned promoter, Saxonside Ltd.
The participants in both schemes sign an employment agreement with the promoter and are subsequently compensated with the National Minimum Wage. The remaining money is later distributed to scheme participants to prevent them from paying income tax and social insurance. These kinds of schemes frequently make false claims that their users can avoid paying income tax and national insurance.
After issuing a stop notice earlier this month, HMRC has now taken another step in its campaign to punish those who facilitate tax evasion. In order to avoid penalties of up to £1 million, the promoter is forbidden from selling their program.
What is tax avoidance?
Tax avoidance is the practice of bending the laws of the tax code in an effort to pay less tax than is legally required.
Even though you might believe it is tough to notice or that you need to be an expert, spotting tax evasion is simple.
The greatest method to prevent tax evasion is to be aware of how you are being paid; this goes for both PAYE and Self-Assessment taxpayers.
Check your pay stubs and contractual obligations to ensure you are paying the correct amount of income tax and national insurance payments and avoid receiving an unexpected tax bill later.
Check out these things to avoid:
Receiving untaxed payments like loans or capital advances obtaining more cash in your bank account than what is indicated on your payslip
You should receive the same amount in your bank account as your net pay on your payslip. This risk analyzer can also be used to determine whether tax avoidance may be a possibility in your present contract.
HMRC has identified a total of 15 businesses that promote tax avoidance strategies. This is not a comprehensive list of every tax evasion scheme currently on the market, nor is it a list of every proponent, enabler, and supplier.