Stop Notices For Umbrella Companies

Certain umbrella companies promote tax evasion scheme’s which are designed to allow subcontractors to avoid taxes, by treating money drawn from the subcontractors companies as loans rather than salary or dividends.

The umbrella companies charge significant fees for running the schemes.

HMRC has argued, over several years, that the schemes do not work . HMRCs actions in dealing with the tax evasion is to seek to recover the undepaid tax from the tax payers. HMRC does not appear to be taking any significant action against the umbrella company ort the directos and shareholders of the umbrella companies.

The typical response of HMRC is to add the umbrella companies to  a ‘stop list’ it maintins which contains similar tax evasion promoting companies. The idea being the subcontractors will check the stop list before deciding to use the services of an umbrella company.