Returning NHS workers targeted by tax avoidance promoters

Many thousands of former NHS workers have returned to frontline services to assist in the fight against the Coronavirus pandemic.  HMRC very quickly issued a note advising that these returning workers were being targeted by unscrupulous promoters of tax avoidance schemes.  These schemes are typically offered through umbrella companies and boast the attractive outcome of being able to take home around 85% of your gross pay after all deductions.

The payments from such companies will frequently fall into two categories.  The first will be a relatively small salary, with the appropriate payslip and proper deductions of PAYE at source.  The second payment will be higher and described as something other than salary, often being referred to as a loan, but also perhaps as an annuity, shares or some other credit facility.  HMRC consider this second payment as disguised remuneration and will raise an enquiry to challenge such methods of payment.  They have frequently won these challenges, and so returning NHS workers need to be very careful what they sign themselves up for as they may end up liable for large amounts of underpaid tax.  If they don’t know fully what they’ve signed themselves up for, they should seek professional advice.

Below is a copy of the relevant HMRC note concerning this:

https://www.gov.uk/guidance/tax-avoidance-promoters-targeting-returning-nhs-workers-spotlight-54


David Walker

Healthcare Services Senior Tax Manager

david.walker@mooreandsmalley.co.uk

01253 404404