HMRC Issues New Guidance on Tax Avoidance for Agency Workers and Contractors
As part of HMRC’s ongoing efforts to tackle tax avoidance, it has released updated guidance specifically aimed at agency workers and contractors. This new information is designed to help individuals identify whether they may have been involved in a tax avoidance scheme—particularly when transitioning between umbrella companies.
The guidance outlines:
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Key warning signs of tax avoidance
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What to do if these warning signs appear relevant to your situation
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How to pay any unpaid tax
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Where to access further support and information
Employment Status and IR35 Rules
Understanding your employment status and how IR35 rules apply can be complex. Since 6 April 2020, all medium and large private sector organisations have been responsible for determining a contractor’s employment status and whether the off-payroll working rules (IR35) are applicable.
For those working with small private sector companies, the rules remain unchanged. In these cases, it is the responsibility of the worker’s intermediary—typically a personal service company (PSC)—to determine employment status and IR35 applicability.
Read our Knowledge Base articles on IR35 Off payroll working. The latest Government guidance is available here.
