Nicely Paid and We PAYE Umbrella added to HMRC’s avoidance list of ‘easy targets’

Nicely Paid Ltd and We PAYE Umbrella Ltd (WPUL) have been added by HMRC to the tax authority’s list of avoidance schemes to avoid.

Currently featuring 23 companies, including dissolved companies like Nicely Paid and WPUL, the Revenue list is a little over 28-weeks-old.

But according to experts, the HMRC initiative to ‘name and shame’ avoidance schemes, promoters, enablers and suppliers, which only started in April, is already showing its age.

'Too little, too late, from HMRC'

“This list barely scratches the surface,” says Fred Dures of umbrella payroll auditor PayePass.

“More schemes are being shut down, but in reality, it’s too little too late for many contractors.

“HMRC is only calling out the easy targets, some of which ceased trading long ago. This hasn’t gone unnoticed and is becoming a real concern.”

'Dozen non-compliant umbrellas recruiting unsuspecting contractors right now'

Tom Wallace of tax dispute firm WTT Consulting agrees.

“Nobody has been involved with [Nicely Paid or WPUL] for at least [the 12-month period that they have both been liquidated for],” he said.

“Meanwhile I could name a dozen non-compliant umbrellas off the top of my head who are active and still recruiting unsuspecting contractors TODAY.

“Perhaps this [list] is not the virtual real-time system HMRC would like us to believe it is.”

'Many, many more schemes HMRC needs to add'

IWORK boss Julia Kermode echoed that the online list of avoidance entities is not being updated “fast enough.”

And she added a warning: “There's still many, many more [avoidance schemes] out there that need to be added [by HMRC].”

On its website, the Revenue caveats that just because a company’s name does not appear on the list, it does not mean that a scheme run by that named company “works”.

Similarly, “there are other schemes, promoters, enablers and suppliers that HMRC cannot publish information about at this time,” .gov. adds.

'Told the Revenue myself'

Giving three reasons why it cannot name such schemes, the Revenue’s statement seems to address the complaints of those like Mr Wallace, who is a former tax inspector.

Taking to LinkedIn, the ex-tax official said that HMRC now knows of the 12 umbrellas which he has found to be operating non-compliantly “because I have told them.”

“The big and active [avoidance] players are well known to HMRC”, enforced Mr Dures of PayePass. “And [they are well known to] many people in the temporary workforce sector.

“It begs the question – when will HMRC show some teeth and name and shame the biggest tax avoidance schemes?”

'Frustrating'

A qualified solicitor, Mr Dures said it was “incredibly frustrating” for advisers like him to see defunct schemes being named too late.

Three companies added to the avoidance blacklist between late August and early September also had already imploded, and stopped operating.

Mr Dures warned: “I wouldn’t recommend anyone to rely solely on HMRC’s list, which is far from comprehensive.”

'My heart skips a beat'

Online, a contractor signalled that for him at least. the avoidance list has already taken on a historical quality, a bit like an occasionally updated archive which he can refer back to.

“Every time I hear [the HMRC avoidance list has been updated] my heart skips a beat, as I quickly mentally run through the list of past companies that I worked through”, the contractor posted. “My heart goes out to those people who worked through these umbrella companies, and who honestly felt that they were completely legitimate.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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