For recruitment companies and temporary workers that arrange or receive pay through umbrella companies, identifying which ones are compliant and trustworthy is challenging. Even with considerable due diligence, recognising the sophisticated tax avoidance schemes that are widespread in the unregulated contracting payroll market is extremely difficult.

One resource is HMRC's regularly updated list of known tax avoidance schemes in operation.  

The current list of named tax avoidance schemes, promoters, enablers and suppliers is not a complete list of active schemes. Nonetheless, when looking into a payroll provider, checking this list is a good place to start.

Currently, there are 67 included on the list. It was last updated on 21 December 2023, with the addition of MLG Pay Limited.

How the list works

HMRC's alphabetical list is updated whenever new schemes, promoters, enablers, and suppliers are identified and verified. However, it does not include all active schemes and their facilitators, with many falling under the radar. Furthermore, of those included on the list, most will be removed after 12 months to comply with legislation, depending on what category they fall into or the specific circumstances of their case.

In some cases, HMRC cannot publish information about fraudulent operators. For example, if representations are in progress or an appeal period is underway.

HMRC encourages anyone involved or affected by listed schemes or who recognises any of the promoters, enablers or suppliers to contact HMRC. The Department also encourages the reporting of any known or suspected tax avoidance schemes not included in the list.

More details on the information that HMRC can publish and how the list is managed can be found here.

How can I protect myself from fraudulent umbrella companies?

The risks of engaging an unscrupulous payroll supplier include incorrect tax deductions, pay skimming, and withholding of holiday pay, which can lead to unexpected, hefty tax bills due to HMRC down the line. As an unregulated sector, choosing to engage only an umbrella company that has been assessed by a reputable industry accreditor is essential.

Umbrella companies that are Members of the Payroll Compliance Authority (PCA) have been forensically assessed to guarantee that they are operating in accordance and compliance with all employment and taxation legislation.