When choosing an umbrella company to work with, cost is always going to be a…
When deciding which umbrella company to work with, it is important to consider whether it is a trusted provider. But how can you deduce this information?
In this article, we explain how HMRC’s interactive risk checker can help contractors find out if their umbrella company is compliant with tax laws and regulations.
How does the interactive risk checker work?
The new widget, called the interactive risk checker, asks contractors a series of questions about their umbrella company, and then provides them with a warning if it thinks they are involved in a tax avoidance scheme.
What are the risks of working with a non-compliant umbrella company?
Despite what some providers may tell you, you are responsible for your own tax affairs. If you have been promised high take home pay or untaxed income, you will be liable for any penalties incurred.
Where can I access this tool?
The HMRC risk checker widget can be accessed via the gov.uk website at any time. Simply answer the questions and it will tell you whether your umbrella provider is a cause for concern.
What should I do if my provider is identified as a risk?
First, check that your umbrella company is accredited with APSCo or Professional Passport (spoiler: we are!). This will confirm whether the company is considered reputable and safe to use by the trusted auditor.
If it is not accredited, look into changing your providers as soon as possible, to avoid any unexpected tax bills. Thoroughly research any prospective providers, and look out for red flags in their THP illustrations.
To find out more about how to spot a tax avoidance scheme, click here.
The team here at Mint are always here to chat if you are unsure of your umbrella company, and will be able to provide trusted, impartial advice on your next steps.
Get in touch today at [email protected].
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