20 October 2023
HM Revenue and Customs (HMRC) has updated the list of named tax avoidance schemes, promoters, enablers and suppliers.
The below scheme has been added as of 20 October 2023:
- 1st Choice Umbrella Ltd - the scheme user enters into an employment contract with 1st Choice Umbrella Ltd (1CU) and are issued a share in the cell company, Omni Contractor PCC Ltd (OCP) that is unique to the scheme user. The scheme user submits timesheets to 1CU who then invoice the agency or end client for the work done by the scheme user. 1CU retains approximately 10% of the invoiced amount, which is purportedly for covering any Capital Gains Tax (CGT) the scheme user may be liable to in relation to the share and transfers this amount to OCP. OCP claim they will return this amount to the scheme user when their CGT liability is confirmed. 1CU also retains a further amount of around 16-18% and then pays the scheme user a National Minimum Wage / National Living Wage salary. OCP pays the scheme user a separate amount but without deductions for tax and National Insurance Contributions (NICs). This supposedly represents the increased share value held in OCP.
HMRC’s briefing on settling disguised remuneration scheme use and / or paying the loan charge is available, here. Disguised remuneration schemes are arrangements that pay loans instead of ordinary income to avoid income tax and NICs. The loan charge has been introduced to tackle the use of disguised remuneration schemes. People who anticipate having difficulty paying what they owe under the loan charge will be able to agree a manageable payment plan with HMRC depending on individual circumstances. There is no limit, and people will be given as long as they need to pay what they owe. This issue briefing sets out information about the loan charge and explains how HMRC will help customers settle their disguised remuneration and/or loan charge liabilities.
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