24 August 2023

HM Revenue and Customs (HMRC) has updated the list of named tax avoidance schemes, promoters, enablers and suppliers.

The below schemes have been added as of 24 August 2023:

  • Payeworx Ltd – the scheme user enters into an employment contract with Payeworx (PWL), and the scheme user’s Personal Service Company (PSC) is issued a share in Contractor Buddy PCC Limited (CBP), a connected protected cell company based in the Isle of Man (IOM). PWL pay the scheme user a salary that is around the minimum amount required by the National Minimum Wage Act 1998. CBP make a separate larger payment without deducting income tax and National Insurance Contributions (NICs) to the scheme user’s PSC, supposedly for a dividend. CBP deduct around 2% from the larger payment as a fee, and a further 19% which they claim is Corporation Tax (CT). However, the rate of CT in the IOM is 0%. The scheme users are expected to distribute the alleged dividend amount as they see fit
  • SmartPay Limited - SmartPay (IOM) signs an employment agreement with the scheme user and a contract for services with SmartPay (UK). The user also enters into a ‘facility agreement’ with Smartpay (IOM), acting as trustee for a related trust whereby the user is provided with a loan facility. SmartPay (UK) then enters a contract for services with a recruitment agency for the user’s services. The recruitment agency then enters a contract for services with the end client. The end client pays the recruitment agency for the scheme user’s services, who in turn pay SmartPay (UK). Following the deduction of a fee, SmartPay (UK) pay the remaining amount to SmartPay (IOM). SmartPay (IOM) pays a salary in line with the National Minimum Wage Act to the scheme user and a payment described as a loan which is made without deductions of income tax or NICs.

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