Tax-avoiding umbrella companies ‘using legit names to entice contractors’

Tax avoidance scheme promoters appear to be putting as much thought into their names as their arrangements to lure contractors.

Frontloading the name of the scheme with keywords that contractors will likely search online for appears to be one increasingly common technique.

For example, “ABC Umbrella” and the “Umbrella Agency” appear to play upon terms that contractors looking for providers would enter into a web search.

‘Providers are taking their names from terms likely to show up on Google’

ABC Umbrella (#3305314), and The Umbrella Agency (#08770710), both had their entries on HMRC’s avoidance ‘blacklist’ updated in May 2025.

“The scheme providers are using names that are likely to show up in Google web searches,” a critic of avoidance schemes, Lucy Smith, told ContractorUK.

“Absolutely that’s cheaper for them to do than invest in a Google Ads campaign, which to target the term ‘umbrella company’ comes at a hefty cost.”

‘Tax avoidance schemes trading on credibility and familiarity’

Alongside Umbrella Agency and ABC Umbrella, Umbrella Link had its entry on Current List of Named Tax Avoidance Schemes revised in May, as did MLG Pay.

“What really jumps out…is just how legitimate some of these scheme names sound,” Shelley Ankers-Wainwright, who vets umbrellas, told ContractorUK.

“[The HMRC-blacklisted schemes increasingly] aren’t shady acronyms or offshore-sounding setups. They’re trading on credibility and familiarity.”

‘Confusion’

The schemes also appear to be trading on the credibility and familiarity of others in the market who are known to be bonafide, established or accredited.

For example, aside from the six schemes (in total) that it updated the entries for in May, HMRC used its list to ‘name and shame’ an entity called Compas.

To a busy contractor in a rush, “Compas” may be mistaken for “Compass,” a SafeRec and Professional Passport-accredited umbrella trading since 2019.

However, Compass (full name -- Compass Contracting & Employment or Compass CE Ltd; #12110858) reassured to ContractorUK:

“We haven't come across this Isle of Man-incorporated company [Compas] before.

“And luckily, [we’ve not] not experienced any confusion with them.”

‘Little or no consequences for HMRC listees’

Alex Fraser, chief operating officer at Compass CE Ltd, issued this reassurance on Friday, meaning no confusion with ‘Compas’ occurred before Friday July 4.

Three other avoidance schemes were newly ‘named and shamed’ by HMRC in May; The Brightest Future, GL Platinum and NM Recruitment Services.

Four schemes were named in June 2025; Pure Employment, Arrow Tree Consulting, Head Restart Signature Professional.

No schemes have been blacklisted so far in July (as of 06.07.25).

Despite the new additions, Professional Passport says some names on lists that HMRC publicises ‘linger for some time with little or no consequences.’

‘Not new enforcement’

An individual, Paul Baxendale-Walker, appears to be one such example, as in May, he received Stop notices for two schemes already under earlier notices.

HMRC said the May issuing was the first time that a ‘Stop’ had hit an individual, but WTT Group has warned against seeing it as “new enforcement.”

At Professional Passport, its boss Crawford Temple says it’s true that the fundamental pros and cons of HMRC enforcement haven’t changed.

‘Far too weak sanctions against non-compliant providers’

“The pattern [on the current list of avoidance schemes] is erratic. Some months, very little activity [from HMRC], while others show a sudden influx.

“[But] the core issue remains unchanged; the sanctions against non-compliant providers are still far too weak,” Mr Temple told ContractorUK, adding:

“These firms often continue to operate with impunity, sometimes under different trading names. And they are flourishing.

“HMRC is still not using the data it holds effectively and continues to lag in enforcing compliance robustly and quickly, providing further incentives to these non-compliant organisations.”

‘As part of detecting red flags, ask for an umbrella contractor pay illustration’

In an attempt to offer some reassurance, avoidance-critic Ms Smith said dissolved providers don’t tend to have their sites “up and running for long.”

Founder of Clarity Umbrella, she continued in a statement: “And those who don’t last are unlikely to pull in that much traffic.

“So the same advice as always stands. Check them out on Companies House, speak to them directly to detect any red flags, and ask for a pay illustration.

“Once they receive the pay illustration, contractors should remember that any take-home for a 40% rate taxpayer of over 55% [in 2025-26] is a massive red flag.”

‘Don’t assume a professional name means professional conduct’

Similarly offering practical advice for contractors, to help them steer clear of non-compliant offerings, Ms Ankers-Wainright, CEO of Umbrella Ready, said:

“An authentic-sounding name is not a substitute for running your own ‘due diligence’ checks.

“Contractors and recruitment agencies mustn’t assume a professional name means professional conduct.

“Instead, always look beyond the name and branding. As a starting point, check for SafeRec, FCSA or Professional Passport accreditation. If the provider has no accreditation, revert to ‘If it looks too good to be true, it probably is’ – and that’s always the case even if it sounds entirely above board.”

Avoidance promoters previously blacklisted by HMRC, but which use contractor search terms as their scheme name, include Compliant Pay, Fast Payroll, and 1st Choice Umbrella.