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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).

U.K. set to push contentious measures as Brexit talks continue

The U.K. government set out plans to introduce a Taxation (Post-Transition Period) Bill and revisit the controversial United Kingdom Internal Market Bill, while EU diplomats reportedly warned that substantial gaps remained in post-Brexit trade talks.

The House of Commons will consider on December 7 amendments made by the House of Lords to the United Kingdom Internal Market Bill, Leader of the House of Commons Jacob Rees-Mogg announced on December 3.

The Lords amendments included the removal of measures overriding the terms of the Northern Ireland protocol in the EU withdrawal agreement. The U.K. government has argued that the measures represent a safety net to protect the integrity of the United Kingdom’s internal market, but the European Commission gave notice in October of a legal action over the government’s refusal to remove them.

My news story for Tax Notes, December 3 (paywall):

https://www.taxnotes.com/tax-notes-today-international/politics-taxation/uk-set-push-contentious-measures-brexit-talks-continue/2020/12/04/2d8l3

U.K. tax scheme promoters face new sanctions

Tax avoidance is not as widespread as people might think, HM Revenue & Customs said as it announced that scheme promoters responsible for misleading advertising will face new sanctions.

An enforcement notice published jointly by HMRC and the United Kingdom’s Advertising Standards Authority requires promoters to be “clear about the potential consequences of tax avoidance” in any online adverts, HMRC said in a November 26 release. Promoters who do not comply with the regulator’s advertising code may have paid adverts removed from search engines, and follow-up compliance action can include referral to trading standards officers, HMRC added.

In a separate report HMRC said it has heard “the very real public anger” about the people who promote contrived avoidance schemes.

My news story for Tax Notes, November 30 (paywall):

U.K. Tax Scheme Promoters Face New Sanctions