Check your payslip if you work through an umbrella company
If you are a contractor or agency worker, it is essential that you check your payslip to ensure you are not involved in a tax evasion scheme conducted by some umbrella companies.
Be mindful when conducting business with umbrella companies that claim you will be able to take home a higher percentage of your pay. It is not every umbrella company that follows tax rules.
Find out how you’ll be paid if you are an agency worker or contractor through an umbrella company: https://www.gov.uk/guidance/working-through-an-umbrella-company
The government’s website has listed ways to help you calculate your Income Tax and National insurance number to prevent tax evasion schemes. Receiving more money in your bank account than the one shown on your payslip could be an indicator of tax avoidance.
How to check your Income Tax and National Insurance:
What to look out for:
You may not be able to see all payments made by the umbrella company on your payslip, you may only see payments made through PAYE to be seen compliant with the tax rules. Some umbrella companies may add additional payment directly into your bank account and send you an email to confirm you have received the payment. These payments could be described as one of the following:
• Profit share
• Fiduciary receipt
• Credit facility
• Capital payment
• Capital advance
Any payment made by the umbrella company that is not subject to PAYE could be a sign of tax avoidance.
For more information on the risks, penalties, and how to report an umbrella company partaking in tax avoidance schemes please visit the government site here or contact a member of our staff at email@example.com