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HMRC provides guidance for spotting a compliant umbrella company

Friday 28th May 2021

Working with a compliant umbrella company is crucial for both contractors and agencies alike. We have likely all heard the unseemly tales of dodgy businesses carrying out a disguised remuneration tax avoidance scheme, under the appearance of an umbrella company, but it is not always obvious that you are dealing with a company like this, until it is too late.

HMRC has now released its own guidance on working with umbrella companies and what to expect when contracting through an umbrella scheme. For the contracting industry, the publication of this guidance is a significant step in the right direction when it comes to tackling non-compliance and increasing their knowledge of the umbrella process.

Red flags to look out for of a non-compliant umbrella company include:

Failing to report an umbrella company or if you are caught using a tax avoidance scheme, you are liable to pay the tax that is due to HMRC, plus any interest, you may also be required to pay a penalty on top of this.

Take a look at HMRC’s full guidance here.

The team here at Sterling has continually provided support to the contractors and agencies we work with on how to spot red flags of a non-compliant umbrella company and the importance of working with a reputable compliant company like ourselves.

If you would like to learn more about our umbrella services please contact our friendly team today.

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