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Published on 23 September 2020

Call for evidence: tackling disguised remuneration tax avoidance

LITRG welcomes the opportunity to respond to HMRC’s call for evidence on tackling disguised remuneration tax avoidance.

Image of an arrow avoiding the word tax
(c) Shutterstock / Profit_Image

Despite the persistent efforts of successive governments to stamp them out, disguised remuneration (DR) schemes continue to operate. There is currently a particular problem with agency workers that work via umbrella companies getting caught up in DR schemes.

Our response focuses on this issue, which in our view, is largely driven by PAYE avoidance behaviour on the part of some employers (the umbrella companies), rather than the workers themselves having any kind of avoidance motive.

  • In our response, we tell HMRC that it is vital that they recognise and understand this so that appropriate strategies can be developed, otherwise there is a risk that HMRC’s actions will fail to be effective because they are based on an erroneous underlying assumption.
  • The call for evidence can be found here.
  • Read our full response here.
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