With the general election campaigns in full swing, all of the main parties are vying to see who can shout the loudest about their clamp down on tax avoidance. So it’s timely that HRMC have added another 3 umbrella companies to their list of non-compliant schemes. It seems whoever is in charge, HMRC are going to stay on the case.
NON-COMPLIANT PAYROLLS NAMED & SHAMED
And HMRC have been busy. You can see the list that have been named and shamed here. Whilst it’s a long roll call, as HMRC point out, this isn’t full list because they can’t name some, some are appealing and some haven’t been found. Yet…
Whether you’re an employee, employer or agency, you do need to stay alert. The amount of money involved in payroll makes it attractive for fraudsters and an area of focus for HRMC.
So, it’s good news that another three schemes have been closed but there remains much to do.
It made me think what would be on my election wish list…
I’d love to see more action from HMRC because I’m fed up of workers getting short-changed and crooks getting away with fraud. Non-compliant schemes lose tax revenue and hurt workers who are (fairly or unfairly) hit with penalties when caught.
I’d love to see repeat offenders being hit with far harsher penalties. My particular bug bear is known offenders who close one fraudulent scheme, and instantly reopen another. It’s painfully obvious and costs HMRC and workers millions every year.
WHY VOLUNTARY ACCREDITATION ISN'T THE ANSWER
I’m yet to be convinced that industry bodies and voluntary accreditations are the complete answer. In the last few weeks, sadly I’ve seen other payroll companies with accreditations galore, blatantly breach HMRC regulations.
I’ve also seen sizeable companies knowingly turn a blind eye to their payroll company's shortcuts.
Maybe this means that complete regulation like the FSA for banks is the way forward however I’d worry that this would push costs up even further at a time when workers and businesses are already stretched to the limit.
Ultimately, I’d love for self-employed workers to be championed and backed to succeed. They’re integral to the UK employment market and in my experience, many want to have a choice about how they get paid rather than being forced down one route.
This goes against the likely review of worker statuses that’s been suggested, and maybe it does leave gaps for people to exploit. But my view is that you always put the worker first.
Whatever happens, I’ll keep banging the drum for fair treatment of workers and calling out bad practice when I see it.
Because there’s really no reason why you can’t give workers flexibility, keep businesses competitive and maintain full compliance.
