Have you been offered higher take home pay through one company over an other?
If you are a contractor, we would pretty much guarantee that at some point you have come across a company that can offer a higher take home pay claims through them?
Stay on the right side of HMRC
Quite simply, if you want to stay on the right side of HMRC, then this isn’t possible. Providing the information that you are comparing between umbrella companies or Intermediaries is the identical, then the only difference you will see is the margin charged by the umbrella. No umbrella can substantiate higher take home pay claims over another! That’s just fact!
HMRC are trying very hard to clamp down on tax avoidance schemes that are on offer to contractors. Legislation has been introduced called GAAR and TAAR which is aimed at prosecuting all of those involved in tax avoidance.
GAAR – General Anti Abuse Rules
The GAAR was introduced in the Finance Act 2013 and took effect from 17 July 2013. It is intended to counteract tax advantages arising from tax arrangements that are abusive. Tax arrangements exist where obtaining a tax advantage is one of the main purposes of the transactions.
TAAR – Targeted Anti Avoidance Rules
On 25 July 2018, HMRC made a number of updates to its guidance on the TAAR in its Company Taxation Manual. These are described as follows. The commentary on Condition C (CTM36330) has been revised so that references to being “involved with” a trade now refer to being “involved with the carrying on of” a trade.
If you have any experiences from companies making these claims, let us know how they say they can achieve this and still keep you safe from investigation from HMRC.