Sam Part says:
May 13 2021 at 8:54 am
“We can’t also know which of these companies will ever declare any of the liabilities that they really owe. Nor will HM Revenue & Customs. They have literally no way of knowing for sure which companies operate false PAYE schemes in the UK”

HMRC have been aware of so-called Mini Umbrella Company fraud for quite a while now and have published warnings and given updates. For example, in an update published by HMRC last December (Employer Bulletin issue 87) , they said they had closed down many thousands of such attempted PAYE frauds and that a number of arrests had been made in November – presumably after many months of investigations. There have been other well publicised arrests over alleged ‘furlough fraud’.

How could HMRC be doing this if they have “literally no way of knowing” what’s going on?

“none of it ill be investigated, let alone prosecuted”

Quite clearly you are wrong in claiming that. If you are going to comment on these things, you should try and stay aware of developments. There’s plenty of information on MCU and other attempted fraud and HMRC’s work to combat it available on the HMRC website.

Richard Murphy says:
May 13 2021 at 9:32 am
They know it is happening

They do not know who is doing it

If they did it would not be happening

It is

You are very clearly wrong here and I am right

A memo does not stop abuse


Prosecutions by HMRC would seem to indicate that HMRC know who is doing it – or at least suspect – and prosecutions have been known to deter crime.

8 thoughts on “Fascinating”

  1. While HMRC do seem to be playing an effortful and clearly not entirely ignorant game of whack-a-mole against these mini umbrellas, wouldn’t it save a whole lot of faff (and money) if the government just removed the incentives that keep them springing up? Which as I understand it, is due to small employers getting a small NI let-off (£4k Employment Allowance) and something similar for VAT – if you create a playing field where something done by one large company can be done cheaper if outsourced to a bunch of artificially small companies, what else do you expect to happen? Do the benefits of the exemptions to the economy really make up for the ensuing fraud?

  2. Is there any good reason at all to keep National Insurance going rather than just roll it all up into income tax?

    (Obscuring the true level of tax on income isn’t a good reason, of course)

    In a previous life I batted off people trying to flog these schemes as a solution to a VAT problem in certain corners of the temporary staff industry. They always stank of something HMRC would challenge and where, when it all washed out, only the lawyers and accountants would be up on the deal.

  3. In a subsequent exchange, Sam Part is challenged by Spud to publish his CV else Spud will not believe him.

    Spud really is an arse. He claims he has used data to ‘prove’ his case. He’s taken one statistic – the number of companies formed recently, and everything else in the blog is conjecture.

  4. Bloke in North Dorset

    “ In a subsequent exchange, Sam Part is challenged by Spud to publish his CV else Spud will not believe him.”

    An interesting variation of the appeal to authority fallacy.

  5. In a subsequent exchange, Sam Part is challenged by Spud to publish his CV else Spud will not believe him.

    In a subsequent exchange, Sam Part is challenged by Spud to publish his CV else Spud will not be… able to complain to his employer to get him sacked.


  6. @MBE

    I suspect someone has done the cost benefit analysis

    Imagine the howls of indignation (probably from the same people) if these concessions were withdrawn

    Interesting file on 4 podcast on this issue

    Seems to me the companies to target are those who are outsourcing

    In File on 4’s case it is serial offenders G4S

    Make them responsible for their entire HR supply chain

  7. @Starfish

    Maybe. I’m sure a serious analyst can do a better cost benefit than my idle soeculation. Still, because of the skew of things, most small businesses are very small, so I imagine don’t get the full benefit of the allowance. The mini umbrellas presumably size themselves optimally to claim the whole lot, with no excess employees to pay. Would scrapping the allowance be a blow to legitimate small businesses? Clearly. Would it prevent some of them, right at the margin, from taking on workers? Presumably, that’s what the economic logic suggests. But then, how much value does that job add, if it’s only viable when a small business is given a bung for doing so?

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