A client approached me recently having spent the last year working in the UK and also on the oil rigs near Aberdeen. Most of this work had been done through PAYE but for a period of approx 3-4 months, he had worked through an umbrella company, namely "Priority Accounts Ltd". This company is registered in the West Indies but operates on the Isle of Man.
According to what he told me, Priority invoice his client and after deducting a weekly fee, pay the balance to my client. They have employed him to perform the work and paid him a 'salary' in return but they have not deducted PAYE. They have told him that this income is not taxable in the UK.
I have told him that he must report this income as self employment earnings on his tax return as without the umbrella company this is what the income would have been. My client is reluctant to do this as it will result in a fairly hefty tax and National Insurance bill for him.
Has anyone else encountered this provider? Any comments welcome as I have been unable to find any reviews of this umbrella scheme.