HMRC release tool for Umbrella workers to check their risk of tax avoidance

18 November 2021


HMRC have released a tool which they claim will help Umbrella workers check their risk of being involved in tax avoidance.

The new ‘interactive risk checker’ asks workers various questions in order to help them find out if their employment arrangements could involve tax avoidance.

The guidance emphasises that it is the legal responsibility of the worker to ensure that their tax affairs are correct and that the correct amount of Income Tax and National Insurance contributions are paid, even where somebody else does this for them.

The tool highlights multiple characteristics that could indicate the existence of tax avoidance, including (but not limited to);

  • Being told that their take home pay will be higher than expected
  • Being told that part of their pay is not taxable
  • Having pay topped up with a non-taxable payment
  • Having deductions on their payslip that they do not understand
  • Being asked to sign more than one contract in a single placement

HMRC have also published further guidance for workers of Umbrella companies in order to assist them in checking their payslip to make sure they are not involved in a disguised remuneration scheme, operated by ‘some umbrella companies.’

The guidance confirms that anyone found using a tax avoidance scheme will be personally liable to pay:

  • the tax and National Insurance contributions that are legally due
  • interest on tax legally due
  • any associated penalty


Aspire Comment:

The release of these guidance documents may contribute further to the misconceptions of umbrella companies, agencies and the intermediary sector.  The questionnaire process involved in the ‘interactive risk checker’ is very simplistic and the two potential outcomes of  ‘You may be involved in a tax avoidance scheme’ or ‘You may not be involved in a tax avoidance scheme’ are lacking in the substance necessary to be useful to individual workers. 

 If this is the current solution it would appear that regulation of umbrella companies remains some way off.   If you require any guidance, get in touch with one of our team on 0121 445 6178 or send us an email at