The government has removed two identified tax avoidance schemes from its official list after legislation which allows for a scheme to be publicised only allows it to be made public for 12 months.
The move has been described as “ridiculous” and “appalling” by two industry experts, who have called on the government to do more to stop the proliferation of tax avoidance schemes.
The schemes removed from the government’s list of tax avoidance schemes, promoters, enablers and suppliers are Absolute Outsourcing and Equity Participation Scheme (EPS), promoted by Purple Pay Limited (PPL).
Julia Kermode, founder of IWORK – the body championing independent workers – commented: “This is a particularly ridiculous piece of legislation. Naming a tax avoidance scheme only to delete it from an official list a year later is crazy. How can anyone steer clear of tax avoidance schemes when HMRC’s own list isn’t up to date? It’s beyond belief. This list isn’t a deterrent for tax avoidance schemes – it’s merely a temporary blip in the history of these so-called companies.
“These schemes wreck lives. They lure in unsuspecting individuals upon the pretence that they are legal and compliant. Then, when HMRC comes calling, the individual is left with a devastating tax bill. Meanwhile, the scheme, along with the people running it, have disappeared into thin air.”
Fred Dures, founder of specialist payroll auditor, PayePass, added: “This would be laughable if it wasn’t so serious. As it stands, the government’s list of tax avoidance schemes is only the tip of the iceberg. Now we find out that due to an absurd piece of legislation, one year on from a scheme being identified, it’s removed from the list. It’s appalling.
“What’s more, the government has only been naming and shaming these schemes for one year. Fast forward a few weeks and months and, at this rate, the list will continue to shrink. It’s one step forward, two steps back – a farcical loophole.
“Few will deny that the umbrella industry needs regulating, yet the government still hasn’t delivered it. It means the responsibility will continue to fall on businesses engaging umbrella companies to ensure compliance and operate transparent payment processes.”