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Two Avoidance Schemes Named by HMRC

HMRC has today used new powers for the first time to name two tax avoidance schemes that target contractors, and anyone using these schemes could end up with a large tax bill.

The two named schemes are:

  • Absolute Outsourcing, of Foerster Chambers, Todd Street, Bury, Greater Manchester
  • Equity Participation Scheme (EPS), promoted by Purple Pay Limited (PPL), of Gracechurch Street, London.

Both schemes involve individuals agreeing an employment contract and working as a contractor. The schemes pay contractors the National Minimum Wage with the remainder of their wage paid through a loan to try to avoid National Insurance and Income Tax.

This is the first time that HMRC has used new powers to name tax avoidance schemes and their promoters as part of a campaign to warn the public not to get caught up in tax avoidance.

It is positive to see HMRC naming scheme promoters, and although there are only two currently they have to start somewhere.  We hope that the list will grow to be much more comprehensive, and they invest in raising awareness of the list so that it becomes an automatic checking point before anyone signs up to an umbrella.  In any case it is certainly a step in the right direction.

If you are using one of these schemes you should seek professional advice that is specific for your situation.

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