HMRC’s “Don’t Get Caught Out” campaign – Professional bodies asked for support
By Justine Riccomini, Head of Taxation (Scottish Taxes, Employment and ICAS Tax Community)
29 November 2021
HMRC has asked the professional bodies to help disseminate its latest information drive amongst workers who may unwittingly end up participating in tax avoidance schemes
On 18 November 2021, HMRC launched a new wave of communications aimed at workers who are sole traders and those working through umbrella companies. HMRC has approached the Professional Bodies in accounting and tax and asked for their support in proliferating their messages.
The “Don’t get caught out” campaign contains useful links divided into four sections to help workers ‘recognise’, ‘understand’, ‘check’ and ‘get help’ if they are worried that they may have unwittingly become embroiled in a tax avoidance scheme.
Recognise
The first section contains information on how workers can recognise a tax avoidance scheme, and highlights three simple things to look out for:
- are the proposed contract pay arrangements incredibly complicated?
- have you been told you’ll take home more money after tax than you would have expected?
- will you get a cash bonus if you recommend a friend?
There is also a link back to the November 2020 quick guide to spotting signs of tax avoidance, which is a reminder of the questions workers should have the courage to step up and ask, even if they feel they are not tax savvy.
Understand
This section encourages workers to think carefully about umbrella companies that they may work with and empowers them to question and scrutinise the arrangements. A guide to what it’s like to work through an umbrella company, published in April 2021, contains information on what to expect, and therefore how to call out unusual situations. Personal stories provide illustrations for the reader.
Check
Armed with the information from the first two sections, workers will then need to do what many of them will find to be the most challenging thing – check payslips. Not many people do this anymore – probably because of a combination of increased complexity and opacity in pay and reward mechanisms, and the fact they are online as opposed to on paper. The result being that many workers have no knowledge of what to look for and how to make the maths add up in a complicated calculation. How does a worker with no knowledge of what tax they should be paying know if their payslip is correct? This section contains some information and illustrative examples which may assist, as well as a risk checker, published in November 2021.
Get Help
Finally, the last section informs the worker how to get help from HMRC, emphasising that sticking one’s head in the sand is not the solution and that each individual is responsible for their own tax affairs.
The email address is counteravoidancecampaign@hmrc.gov.uk. There is also a link to further information on how to extricate one’s self from a tax avoidance scheme, after the taxpayer discovers they are participating in one.
Reporting tax avoidance
The web page also offers individuals the opportunity to whistle blow on tax avoidance they may be aware of, have been encouraged to participate in or where they personally know someone they believe to be selling schemes.
Joint and several liability
In addition to this campaign, HMRC has recently published links to a new series of compliance check factsheets covering joint and several liability notices that can be issued to individuals connected with companies (usually directors) where there is a risk of tax or penalties not being paid. These fact sheets cover coronavirus support payments, tax avoidance and evasion, repeated insolvency and non-payment and facilitating tax avoidance or evasion.
Moral
Any ICAS Member who is advising sole trader or umbrella company/agency workers on taxation matters should ensure their client understands the potentially serious outcomes of participating in these schemes, and bear in mind that they can also look to the Professional Conduct in Relation to Taxation (PCRT) guidance and speak to ICAS about any matter they are concerned about.