On 23 August 2018, HMRC published Spotlight 45 in which they provide guidance on what taxpayers should do if an agency or umbrella company offers to reduce their tax liability.
HMRC suggests that taxpayers should check whether:
• the company is claiming that taxpayers will keep 80% or more of their salary
• only a small amount of their salary is paid through payroll and subject to PAYE (indicating that tax is only being paid on part of the income) or whether the payment from the umbrella company is routed through various companies
• they are paid using a loan, credit or investment payment and the company claims that this is not subject to income tax or National Insurance contributions.
A copy of Spotlight 45 can be viewed here.