Workers are being urged to scrutinise their payslips by the HMRC as they could be left facing crippling bills.
HM Revenue and Customs has issued a fresh round of warnings, with particular concern focused on contractors and agency staff who are paid through so-called umbrella companies. The tax authority says many are being lured by promises of higher take-home pay, only to discover later that they owe thousands of pounds in unpaid tax, interest – and in some cases, penalties on top.
The red flags to watch for
According to the taxman, the tell-tale signs of a scheme include money landing in a bank account that doesn’t match the figure on the payslip, and so-called “untaxed payments” dressed up as loans or advances rather than ordinary wages.
Officials say the golden rule is simple: the amount hitting your bank account should always match your net pay as shown on your payslip. Any mismatch, they warn, should ring alarm bells.
Nurses among the victims
Among those caught out is Chantelle, a nurse from Watford, who grew suspicious after noticing that pay from a new agency job was arriving in her account without any tax being deducted. She contacted HMRC directly for help after spotting the discrepancy.
Another nurse, Tanya, a single mother, says she was persuaded to sign up to an arrangement that later left her saddled with a hefty and unforeseen tax demand.
Duncan, an IT project manager, says he turned to an umbrella company simply to take the hassle out of his payroll paperwork – only to find, without checking the small print, that he had been enrolled in an avoidance scheme.
Crucially, HMRC insists that responsibility for paying the correct tax rests with the individual under UK law – even when someone else has managed their affairs and given poor advice. Those found to have used an avoidance scheme must pay the tax legally owed, plus interest, on top of any fees already handed over to whoever sold them the arrangement in the first place.
However, the Revenue insists it is not on a mission to punish those who come forward. Anyone who suspects they may be caught up in a scheme is being urged to contact HMRC as soon as possible, with officials promising support rather than “judgment” to help settle affairs – including, where needed, the option to pay off what’s owed in instalments.
How to report it
Workers who believe they have been mis-sold a scheme, or who know of one operating, can report it anonymously to HMRC using the code ‘TAC’ on its online form, or by calling 0800 788 887 (+44 (0)203 0800 871 from overseas).
HMRC has also published a series of guides – including a risk checker tool and a rundown of the tactics scheme promoters allegedly fail to disclose – to help contractors and agency workers protect themselves before signing on the dotted line.
Anyone concerned about their own tax position is advised to check their payslips carefully and seek guidance directly from HMRC. More details here.
