A lot of contractors, especially in the healthcare sector are having inquiries being opened by HMRC regarding their relationships and payment arrangements with some Umbrella Companies.

 

The letters are covering at most 3 years depending on the amount of time you were being paid under various tax avoidance schemes being run by some umbrella companies.

 

The best thing to do when you receive these letters is to contact your accountant and disclose to them as much information regarding your dealings with those companies. Disclosures will have to be made to HMRC through their Anti Avoidance Team to that effect.

 

Going forward, contractors should take extreme care when engaging an umbrella company. Their payslips should look like the usual normal payslips. Their contract should only talk of complying with HMRC payroll rules.