HM Revenue and Customs has put out a warning for many workers
Workers are being told to take a close look at their payslips after HM Revenue and Customs warned that many people could be getting pulled into tax avoidance schemes without realising it – and left facing eye-watering bills later.
HMRC’s warning centres on a few common red flags. One is when the amount paid into your bank account doesn’t match the figure shown on your payslip. Another is when part of your pay is described as something other than wages – for example “untaxed payments” presented as loans or advances. HMRC’s message is straightforward: your net pay on the payslip should be the same as the amount that arrives in your account. If it isn’t, officials say that should be treated as an immediate alarm bell.
The concern is greatest for contractors and agency staff paid through “umbrella companies”, where pay can be routed in ways that make it harder to spot what is really going on. HMRC says the schemes are often sold with the lure of a bigger take-home figure, but the sting comes later when people discover they still owe tax – plus interest and, in some cases, penalties as well.
The tax authority is urging anyone paid this way to check their paperwork and bank statements now, because spotting the signs early can prevent a nasty surprise landing months or years down the line.
Nurses and contractors describe being caught out
The warning comes after a string of workers said they were drawn into arrangements they didn’t fully understand. Chantelle, a nurse from Watford, became concerned when money from a new agency role started arriving in her account with no tax deducted. After noticing the discrepancy, she contacted HMRC directly for help.
Another nurse, Tanya, a single mother, says she was persuaded to sign up to an arrangement that later left her with a large, unexpected tax demand.
Duncan, an IT project manager, says he used an umbrella company to avoid dealing with payroll admin – but later discovered he had been placed into an avoidance scheme after not checking the small print.
“No judgment” – but HMRC says you still have to pay
HMRC has stressed that, under UK law, it is the individual who is responsible for paying the right amount of tax – even if someone else handled their pay and gave bad advice. That means anyone found to have used an avoidance scheme will still be expected to pay the tax due, plus interest, on top of any fees they have already paid to the promoter of the scheme.
However, officials say they are not looking to punish people who come forward. Anyone who thinks they may be involved is being urged to contact HMRC quickly, with support available to help put things right – including payment plans to spread the cost where needed.
How to report a scheme
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. It can also be reported by phone on 0800 788 887, or from overseas on +44 (0)203 0800 871.
HMRC has also published guidance for contractors and agency staff, including a risk checker tool and information about tactics it claims some promoters do not make clear. Anyone worried about their own situation is being advised to check payslips carefully and seek guidance directly from HMRC. More details can be found here.
