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Mini-umbrellas: Signs of NIC avoidance

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HMRC has been aware of schemes using mini-umbrella companies since at least 2015, so why are these schemes still widely used to avoid payment of NIC and VAT?

17th Jun 2021
Consultant at Chartergate Legal Services Ltd
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Six years following the initial exposé, the BBC and other media outlets have recently brought to the forefront the continued abuse of the employment allowance, claiming that more than 48,000 limited companies have been created in the past five years alone as part of the scheme costing the UK hundreds of millions of pounds in lost taxes.

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By Paul Crowley
17th Jun 2021 12:54

Agree
This is an issue that HMRC and HM Gov appear to be unable to deal with because there is nothing illegal happening.
There are bigger fish to fry
MTD imposed on the Digitally excluded and reluctant SO much more important

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By Hugo Fair
18th Jun 2021 19:06

So where are the "Signs of NIC avoidance" referred to in the title?
Article merely says what 'The scheme' is - not how to identify/observe the signs.
And there is no NIC avoidance, in that the participants are merely following the scheme rules.
The MUCs are 'abusing' the intention of the scheme, but that's because it's a shoddy piece of legislation in support of a dubious and politically-driven agenda.
Unlike VAT fraud, EA never results in cash to the claimant - merely a reduction in ER NICs from some tin-pot operations.
If the govt really wanted to tackle this (and several other schemes) they would enforce proper controls on the registration of companies (and subsequent Co's House notifications).

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