Disguised Remuneration Schemes HMRC Contractors 2020-12-01
2020-12-01
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Questions & Answers
Q1
Direct Answer
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Context
The question arises from concerns about the use of illegal payment methods by firms working with HMRC and the lack of checks conducted by HMRC on contractors.
How many contractors have worked for HMRC while using disguised remuneration schemes?
Her Majesty's Revenue and Customs are aware of 15 contractors who have used disguised remuneration schemes while engaged either by the department or by Revenue and Customs Digital Technology Services. In each of the cases, the contractors were engaged via an agency or a company providing this service.
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Q2
Partial Answer
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Context
The question arises from concerns about the fairness of HMRC's actions regarding taxpayers who entered into payments through disguised remuneration schemes and were later declared illegal.
I am amazed at the Minister's answer—that firms can use methods of payment that HMRC then declares to be illegal and that no checks have been done by HMRC on those contractors. Does he not accept that it is unfair to put the burden on taxpayers who first of all entered into payments through disguised remuneration because we were forced to do so, and who declared that on tax returns which HMRC did not challenge, yet HMRC is now telling us that it did not even check that contractors it employed were paying in that way? How many of these contractors have HMRC actually pursued for forcing employees to use schemes that have been deemed illegal?
I think the right hon. Gentleman is slightly unclear on this. HMRC takes careful steps to ensure that the people whom it deals with as agencies employ on a proper and appropriate basis. When, in very rare cases among hundreds and hundreds of contractors in a fast-moving market, it may become clear that someone has in fact been hired under such a scheme, it takes immediate steps to end that relationship and then to follow up, of course, and to pursue as may be required under law.
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Assessment & feedback
The Minister did not provide specific details on the number of contractors HMRC has pursued for using illegal payment methods.
Slightly Unclear On This
Response accuracy