HMRC is urging workers, particularly contractors and agency staff paid through umbrella companies, to scrutinize their payslips for red flags that could lead to unexpected tax bills. The tax authority warns that many people are lured by promises of higher take-home pay, only to later discover they owe thousands of pounds in unpaid tax, interest, and penalties.
Key Red Flags on Payslips
The tell-tale signs to look out for include a net pay figure that does not match the amount deposited into the bank account, as well as so-called 'untaxed payments' disguised as loans or advances rather than ordinary wages. According to HMRC, the golden rule is simple: the amount landing in a person's bank account should always match the net pay shown on their payslip. Any mismatch should ring alarm bells.
Affected Workers
Reports indicate that two nurses are among those affected. One contacted HMRC after noticing her pay from a new agency job entered her account without any tax deducted. The other was persuaded to sign up to an arrangement that later led to an unforeseen tax demand. An IT project manager also fell victim, having turned to an umbrella company to avoid payroll paperwork hassle but unknowingly enrolled in an avoidance scheme.
Responsibility Lies with the Individual
HMRC emphasizes that the responsibility for paying the correct tax lies with the individual, even if someone else managed their financial affairs or gave poor advice. However, the Revenue is not out to punish those who come forward after discovering the fault. While anyone using a tax avoidance scheme must pay the money owed, plus interest and any fees paid to the scheme promoter, support is available.
How to Get Help
Workers are urged to contact HMRC as soon as possible. Available help includes assistance to settle affairs, such as an option to pay owed money in instalments. Those who think they have been mis-sold a scheme, or know of one operating, can report it anonymously using the code 'TAC' on HMRC's online form or by calling 0800 788 887. HMRC also provides guides, including a risk-checker tool and a guide to tactics scheme promoters may fail to disclose.
Anyone concerned about their tax position should check their payslips carefully and contact HMRC for guidance.
