HM Treasury urged to act to prevent switch to loan schemes

Serious and urgent work is needed to prevent any “mass shift of contractors” into loan arrangements via umbrella companies in response to changes in U.K. off-payroll legislation, according to the Low Incomes Tax Reform Group (LITRG).

But the “general poor reputation” of umbrella companies does not uniformly match the reality and is “not deserved by many in the sector,” Victoria Todd, head of LITRG, said in a March 24 release.

LITRG’s 150-page report explains how umbrella companies and other intermediaries operate in the U.K. labour market, devotes two chapters to “the benefits and complexities” of umbrella companies, and explores the use of disguised remuneration schemes. The report, based largely on research conducted in November 2020, acknowledges financial support from the Trades Union Congress…

Read more: My news story for Tax Notes, March 26 (paywall).

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