Umbrella Co - how do they do it?

Umbrella Co - how do they do it?

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I earlier posed a question about my client (Ltd Co - caught by IR35) being classed as self employed by advisor. Advisor was an Umbrella Company who would charge 7% of my client's turnover. My client would do work at A who would pay Agency B who would be invoiced by Umbrella Co. My client would invoice Umbrella Co who would class him as self employed and do his tax return accordingly together with some very imaginative expense claims.

After speaking to my client about work done, I was of the opinion that HMRC would not class him as self employed. Umbrella Co would presumably be assessed for PAYE and NIC on his earnings. Could Umbrella Co obtain some sort of PI against this? PAYE and NIC would exceed fees earned from my client or do they risk not being caught?

Client was cold called by Umbrella Co. Any one had experience of this?
Harry

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By billgilcom
27th Apr 2007 17:11

"Imaginative?"
It was schemes like imaginative expenses claims that got HMRC so interested in this MSC sector. I suppose your client didn't realise that he be potentially tax evading with his imaginative expenses claims

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