List of tax avoidance schemes subject to a stop notice

Question 1

1.  Current list of tax avoidance schemes subject to a stop notice

Accepted Answer

The list is presented in date order and will be updated regularly.

The most recent update was on 14 November 2024.

This is not a complete list of all tax avoidance schemes currently being marketed. If a tax avoidance scheme is not shown in the list, this does not mean that the scheme works or is in any way approved by HMRC.

Stop notice 1

Date of publication: 2 March 2023
Date stop notice issued: 19 December 2022

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

A contractor requires an umbrella company in order to enter a contract with an end client to provide their services and receive payments. In these arrangements the umbrella company is registered offshore (company A).
The contractor enters into an Employment Agreement with company A.
A UK company (company B) provides onshore support to the offshore umbrella company to facilitate the engaging of end clients and recruitment agencies.
The employee then undertakes work for the end client and submits timesheets either directly to company B or their agency who pass on the details to the company B. Company B invoice the end client for the work done and receive payment from the end client. The invoices sent to the end client reflect the agreed contract value for services of the contractor.
The contractor then receives a salary payment based on the National Minimum Wage rate which is made through the payroll and a second payment, an ‘advance’ which is not made through the payroll and not declared for tax and NIC. This payment was described to an employee as ‘an advance on a discretionary bonus which we have not yet determined, and is therefore non-taxable’.

Stop notice 2

Name of promoter of scheme: Saxonside Limited
Date of publication: 2 March 2023
Last updated: 7 June 2023
Date stop notice issued: 13 December 2022

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Scheme Users enter into an employment contract (‘the Employment Contract’) with Saxonside Limited. The Employment Contract stipulates that the employee will work on client assignments and in so doing will become an employee of Saxonside Limited. In relation to payment, it states that Saxonside Limited will pay the employee (ie, the Scheme User) at least the National Minimum Wage (NMW).
At the same time, Scheme Users enter into an agreement to grant an option (‘the Option Grant Agreement’) with Saxonside Limited. This is the preliminary agreement under which Scheme Users (called ‘the Grantor’ in the agreement) undertake to grant an option which, if exercised, requires the Grantor to enter into an annuity agreement in which Saxonside Limited (‘the Grantee’) is the annuitant and the Grantor is the obligor. The Grantor is not permitted to assign any rights or obligations under the agreement without Saxonside Limited’s consent. On the other hand, Saxonside Limited has full discretion to assign all or part of its rights under the Option Grant Agreement without the consent of the Grantor. The Grantor would become required to grant the option only after receiving a ‘further consideration’ of £1000 from Saxonside Limited. As the Grantee, Saxonside Limited agrees to make payments to the Grantor as consideration for receipt of the grant. These payments are claimed to be capital payments as a result of this agreement and are not made subject to deductions of tax or NIC.
The annuity agreement (‘the Annuity Agreement’) users will enter into with Saxonside Limited is contained within schedule 2 of the Option Grant Agreement. The Annuity Agreement records the terms of the deferred private annuity contract, which is the subject of the Option Grant Agreement, as agreed between the parties. The Annuity Agreement records that the yearly calculation for payments will be determined by the formula set out in the agreement. The agreement stipulates that ‘such payments will commence on the first day of January 2035 and will continue to be paid annually on this date for the life of the obligor’.
Saxonside Limited invoices the recruitment agency or end client for the services carried out by the Scheme Users based on the hours worked and the appropriate hourly rate.
Saxonside Limited receives the funds for the services carried out by Scheme Users from the recruitment agencies or end clients.
The amount that each Scheme User is entitled to be paid is confirmed in the Employment Contract as being in line with the NMW. This is paid by Saxonside Limited in line with the NMW hourly rate. This is confirmed by the payslips and the bank statements of Scheme Users.
Saxonside Limited withholds and retains a percentage, being approximately 20% of the amount invoiced to the recruitment agency or end client for the services carried out by Scheme Users (‘the gross contract value’). It then pays the balance, after the payment of NMW, as payment for the grant of an option to Scheme Users (see 8 below). This balance is confirmed in a notification issued by Saxonside Limited to Scheme Users (the ‘Option Grant Note’).
Saxonside Limited makes a second payment to Scheme Users called the ‘Grantee’s Payment’, as referred to in the Option Grant Agreement and Annuity Agreement. These are evidenced in the Option Grant Notes as well as the Scheme Users’ bank statements which show an aggregate total in accordance with the net salary per the payroll and the second payment noted on the Option Grant Note from Saxonside Limited the same day. These are paid in one aggregate payment. The second element of the payment is made without deductions of tax and NICs.
The Grantee payments that Saxonside Limited makes to Scheme Users are claimed not to be subject to income tax or National Insurance contributions.

Stop notice 3

Date of publication: 2 March 2023
Date stop notice issued: 6 December 2022

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

The user enters into a Contract of Employment with Company X which provides that the employee will be paid for time worked at the National Minimum Wage (NMW) rate or, if applicable, the National Living Wage (NLW) rate unless otherwise specified in the Employee Assignment Schedule. At the same time the user also enters into a Loan Agreement.
The loan amount is unspecified. Company X (lender) promises to loan certain monies to the borrower (ie, the scheme user) and the borrower promises to repay the principal amount to the lender plus 2% interest above the official HMRC rate. The loan is said to be repayable within 60 days on written demand from the lender and is secured against ‘any achieved bonus payments’
Users also enter into a ‘Bonus, Incentive or Pay Scheme Offer’ agreement with Company X. The offer invites the user to participate in a bonus scheme where Company X will pay a bonus in the event of the user generating in excess of 170% of their employment cost The bonus paid will be between 100% and 170% of the total employment cost attributable to the user. Company X enters into a contract with end client directly or via an agency. The employee then undertakes work for the end client/agency and submits timesheets either directly to Company X or their agency who pass on the details to Company X.
Company X invoices the end client for work done, then receives payment for services from the end user or agency.
Company X issues a payslip to the user and deduct a management fee of 15% from the gross amount received from the end client as shown in the ‘Company Deductions’ section of the payslip.
Company X pay NMW and holiday pay at an hourly rate as outlined in the Contract of Employment. National Insurance contributions (NICs) and PAYE are deducted from the NMW/NLW and holiday earnings.
Company X pay the remaining balance in the form of loan, the terms of which secure repayment against any future bonus or incentive payments arising from the ‘Bonus, Incentive or Pay Scheme Offer’ Agreement users enter into with Company X. No tax or NICs are paid on the loan.

Stop notice 4

Name of promoter of scheme: PAYEme Ltd
Date of publication: 2 March 2023
Last updated: 18 April 2024
Date stop notice issued: 1 November 2022

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Users of the arrangements (‘Scheme Users’) enter into a Contract of employment (‘the Contract of Employment’) with PAYEme Ltd. The Contract of Employment provides that the employee will be paid for time worked at the ‘pay rate’ which is defined as ‘a sum per hour equivalent to the minimum allowed by National Minimum Wage Act 1998 (NMW) and a commission in accordance with the Commission Plan shown at Schedule 1. The Contract of Employment also states that PAYEme Ltd does not provide any work finding services (clause 2.4).
Scheme Users enter into an Advance Agreement (‘the Master Advance Agreement’) with PAYEme Ltd in its capacity as the sole trustee of a settlement (‘the Settlement’) known as the PAYEme Ltd Settlement between (1) the settlor and (2) the Employer as original trustee. The Master Advance Agreement provides that PAYEme Ltd will make an initial advance and further advances to the Scheme User. Each advance is repayable on the ‘thirtieth anniversary of it being made’ and is interest free until due for repayment.
Scheme Users undertake work for an end client and submit timesheets either directly to PAYEme Ltd or their agency who pass on the details to PAYEme Ltd.
PAYEme Ltd invoices the end client for the work done and receives payment from the end client. The invoices sent reflect the agreed contract value for services of the Scheme User.
PAYEme Ltd withholds and retains a percentage amount of around 18% of the amount invoiced to the agency or end client for the services carried out by the Scheme User and pays the balance remaining to the Scheme User in 2 ways: a salary payment based on NMW through the payroll, and the ‘advance’, which is not made through the payroll and not subjected to income tax and National Insurance contributions.

Stop notice 5

Name of promoter of scheme: Contractorcare Ltd
Date of publication: 2 March 2023
Last update:18 April 2024
Date stop notice issued: 23 August 2022

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Users of the arrangements (‘Scheme Users’) enter into a contract of employment (‘the Contract of Employment’) with Contractorcare Ltd. The Contract of Employment provides that the employee will be paid for time worked at the ‘pay rate’ which is defined as ‘a sum per hour equivalent to the minimum allowed by National Minimum Wage Act 1998 (NMWA) and a commission in accordance with the Commission Plan shown at Schedule 1’. The Contract of Employment also states that Contractorcare Ltd does not provide any work finding services (clause 2.4).
Scheme Users enter into an Advance Agreement (‘the Master Advance Agreement’) with Contractorcare Ltd in its capacity as the sole trustee of a settlement (‘the Settlement’) known as the Contractorcare Ltd Settlement between (1) the settlor and (2) the Employer as original trustee. The Master Advance Agreement provides that Contractorcare Ltd will make an initial advance and further advances to the Scheme User. Each advance is repayable on the ‘thirtieth anniversary of it being made’ and is interest free until due for repayment.
Scheme Users undertake work for an end client and submit timesheets either directly to Contractorcare Ltd, or their agency who pass on the details to Contractorcare Ltd.
Contractorcare Ltd invoices the end client for the work done and receives payment from the end client. The invoices sent reflect the agreed contract value for services of the Scheme User.
Contractorcare Ltd withholds and retains a percentage amount of around 17% of the amount invoiced to the agency or end client for the services carried out by the Scheme User and pays the balance remaining to the Scheme User in 2 ways:

a salary payment based on minimum rates allowed under the NMWA through the payroll
the ‘advance’ which is not made through the payroll and not subjected to tax and National Insurance contributions

Stop notice 6

Name of promoter of scheme: Focus Contractor Limited
Date of publication: 13 April 2023
Second update: 7 June 2023
Last updated: 12 October 2023
Date initial stop notice issued: 13 February 2023
Date latest stop notice issued: 6 June 2023

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Scheme Users enter into an employment contract (‘the Employment Contract’) with Focus Contractor Limited. The Employment Contract stipulates that the employee will work on client assignments. In relation to payment, it states that Focus Contractor Limited will pay the employee (ie the Scheme User) the applicable National Minimum Wage or, if applicable, the National Living Wage (NMW).
At the same time, or shortly afterwards, Scheme Users are issued a share in the Isle of Man protected cell company, Company Y. The share is in a cell that is specific to the Scheme User.
Focus Contractor Limited invoices the recruitment agency or end client for the services carried out by the Scheme Users based on the hours worked and the appropriate hourly rate.
Focus Contractor Limited receives the funds for the services carried out by Scheme Users from the recruitment agencies or end clients.
The amount that each Scheme User is entitled to be paid is confirmed in the Employment Contract as being in line with the NMW. Focus Contractor Limited makes a payment to the Scheme User in line with, or slightly above, the NMW hourly rate. This is confirmed by the payslips and the bank statements of Scheme Users.
A secondary, nontaxed payment is made to the Scheme Users. The secondary payments are said to be made in connection with an increase in the value of the share in the unique cell in Company Y that is specific to the Scheme User. No PAYE Income Tax is deducted and accounted for in respect of the payment, nor are any National Insurance Contributions deducted and accounted for in respect of the payments.
An amount of approximately 10% is said to be retained in an escrow account, purportedly to cover the Scheme Users’ future Capital Gains Tax liabilities.

Stop notice 7

Name of promoter of scheme: Purple Pay Limited (PPL)
Address of promoter: 70 Gracechurch Street, London, EC3V 0HR
Date of publication: 13 April 2023
Date stop notice issued: 6 January 2023
Last updated: 7 December 2023

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

PPL invoice and receive payment from the end user.

PPL pay the user around 5% of this amount as wages which is taxed under Pay As You Earn (PAYE).

PPL pay around 75% of this amount as an advance to the user under the employee cash flow facility. This amount is not taxed under PAYE.

PPL retain around 20% of the invoiced amount as their fee.

The user enters into a contract of employment with PPL. This contract provides that the users wages will be at the applicable National Minimum Wage (or, if applicable, the National Living Wage) rate, unless the employee assignment schedule states otherwise.
The user enters into a second agreement called the Employee cash flow facility. This is essentially a loan between the user and PPL and allows PPL to provide unsecured advances to the user.
PPL enter into a contract for services with end users.
The user enters into a Co-ownership (Co-op) agreement with PPL and the trustee of the Purple Pay employee share ownership trust. As part of this agreement, the user is said to acquire a joint interest in shares of PPL.
PPL pay the user wages at the National Minimum Wage or National Living Wage. This payment is taxed under PAYE.
PPL pay advances to the user as per the employee cash flow facility. These payments are not taxed under PAYE.
The user disposes of their joint interest in shares acquired under the Co-ownership (Co-op) agreement and any dividend, distribution or proceeds of sale in relation to this joint interest is said to pay off the advance payments the user received from PPL (as written into the terms of the Co-ownership (Co-Op) agreement and employee cash flow facility).

Stop notice 8

Date of publication: 13 April 2023
Date stop notice issued: 28 March 2023

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

The user enters into a contract of employment with Company X. This contract provides that the users wages will be at the applicable National Minimum Wage (or, if applicable, the National Living Wage) rate, unless the employee assignment schedule states otherwise.
The user enters into a second agreement called the employee cash flow facility. This is essentially a loan between the user and Company X and allows Company X to provide unsecured advances to the user.
Company X enter into a contract for services with end users.
The user enters into a Co-ownership (Co-op) agreement with Company X and the trustee of the Company X employee share ownership trust.
Company X pay the user wages at the National Minimum Wage or National Living Wage. This payment is taxed under PAYE.
Company X pay advances to the user as per the employee cash flow facility. These payments are not taxed under PAYE.

Stop notice 9

Date of publication: 13 April 2023
Date stop notice issued: 24 January 2023

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Scheme Users enter into contracts of employment with Company X. The contract stipulates at clause 3.1.1, that the contractor will receive National Minimum Wage (NMW) or National Living Wage (NLW) if applicable.
Scheme Users also enter into an Option Agreement with Company X. In the agreement, Company X agree to pay the Scheme User and in return they grant Company X the right to oblige Company X and them to enter into an annuity agreement. Entering into the annuity contract is conditional upon various criteria being met.
Company X then enter into contracts for services with end clients or agencies for the provision of the Scheme Users’ services.
End clients/Agencies pay Company X for the provision of the Scheme Users’ services based on timesheets completed.
In line with the contract of employment, the Scheme Users are paid NMW/NLW. The amounts are calculated based on hours worked per timesheets. Evidence obtained confirm payments appear to be made from Company X to the Scheme Users, but the amounts paid exceed the NMW/NLW pay shown on the payslips.
HMRC understand that the additional amount paid is said to be payments under the Option Agreement. The amounts are said to be investments and are therefore not subject to PAYE despite the overall amount being a relative percentage of the Scheme User’s gross contract value.

Stop notice 10

Date of publication: 13 April 2023
Date stop notice issued: 24 March 2023
Last updated: 27 July 2023
Date stop notice ceased to have effect: 11 June 2023

Stop notice ceased to have effect

The users enter into an employment contract (‘the Employment Contract’) with Company X. The Employment Contract stipulates that the employee will work on client assignments and in so doing will be become an employee of Company X. In relation to payment rate, it states that Company X will pay the employee at least the National Minimum Wage (NMW) pay rate together with any commission to be paid under the ‘Commission Plan’ (section 9 (a) (i)). It states that the Commission Plan cannot be altered retrospectively, and no payment can be made in excess of the pay rate unless it is in accordance with this commission plan which is available on request. There is no mention in the Employment Contract that the employee will receive loans or advances.
Once the users are employees of Company X, they are then required to forward timesheets to Company X after completing their work for the relevant period. The users obtain a timesheet from the agency or end user and forward this to Company X. Company X then invoice the recruitment agency or end user for the services carried out by the users. Once Company X receive the funds for the services carried out, they then process the next step of the arrangements.
Company X withholds and retains a percentage amount, being between 15% and 20% of the amount invoiced to the recruitment agency or end user for the services carried out by the users (‘the gross contract value’) and pays the balance remaining to the users (as 2 separate payments).
The amount that each of the users are entitled to be paid is confirmed in the Employment Contract as being in line with the NMW. This is paid by Company X in line with the NMW hourly rate.
Company X also makes a secondary payment to the employee which is deemed to be an informal loan or advance. These are evidenced in the bank statements of the users which show an amount from Company X noted as salary in accordance with the net salary per the payroll and a second payment noted as pay from Company X the same day. This secondary payment is made without deductions of tax and NICs.

Stop notice 11

Name of promoter of scheme: Peak PAYE Ltd
Date of publication: 13 April 2023
Last updated: 7 June 2023
Date stop notice issued: 17 November 2022

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

The users enter into an employment contract (‘the Employment Contract’) with Peak PAYE Ltd. The Employment Contract stipulates that the employee will work on client assignments and in so doing will become an employee of Peak PAYE Ltd. In relation to payment, it states that Peak PAYE Ltd will pay the employee at least the National Minimum Wage (NMW), or National Living Wage where appropriate.
At the same time, the users enter into an Agreement to Grant an Option (‘the Option Grant Agreement’) with Peak PAYE Ltd. This is the preliminary agreement under which the users (called ‘the Grantor’ in the agreement) undertake to grant an option which, if exercised, requires the Grantor to enter into an annuity agreement in which the ‘Grantee’, Peak PAYE Ltd, is the annuitant and the Grantor is the obligor. The users are not permitted to assign any rights or obligations under the agreement without Peak PAYE Ltd’s consent. On the other hand, Peak PAYE Ltd has full discretion to assign all or part of its rights under the Agreement without the consent of the users. The users would become required to grant the option only after receiving a ‘further consideration’ of £1000 from Peak PAYE Ltd. As the Grantee, Peak PAYE Ltd agrees to make payments to the user as consideration for receipt of the grant. These payments are claimed to be capital payments as a result of this agreement and are not made subject to deductions of tax or National Insurance Contributions (NICs).
The users also agree to enter into an annuity agreement (‘the Annuity Agreement’) with Peak PAYE Ltd. The wording of the Annuity Agreement is attached to the Option Grant Agreement at Schedule 2. The Annuity Agreement records the terms of the deferred private annuity contract, which is the subject of the Option Grant Agreement, as agreed between the parties. The Annuity Agreement records that the yearly calculation for payments will be determined by the formula set out in the agreement. The agreement stipulates that ‘such payments will commence on the first day of January 2035 and will continue to be paid annually on this date for the life of the obligor’. The requirement to enter into the Annuity Agreement is triggered by Peak PAYE Ltd exercising the option under the terms of the Option Grant Agreement. In summary, Peak PAYE Ltd makes payments to the user and then at a later date can pay £1,000 to exercise the option, triggering a requirement for the user to make payments to Peak PAYE Ltd under an annuity which are based on the sum of the payments made by Peak PAYE Ltd to the user.
Once the users are employees of Peak PAYE Ltd, they are then required to forward timesheets to Peak PAYE Ltd using a portal for this purpose. The next stage in the operation of arrangements is that the users obtain a timesheet from the agency or end user and forward this to Peak PAYE Ltd. Peak PAYE Ltd then invoices the recruitment agency or end user for the services carried out by the users based on the hours worked and the appropriate hourly rate. Once Peak PAYE Ltd receives the funds for the services carried out, they then process the next step of the arrangements.
The amount that each of the users is entitled to be paid is confirmed in the Employment Contract as being in line with the NMW. This is paid by Peak PAYE Ltd in line with the NMW hourly rate. This is confirmed by the payslips and the bank statements of the recipients.
Peak PAYE Ltd withholds and retains a percentage amount, being between 15% and 20% of the amount invoiced to the recruitment agency or end user for the services carried out by the users (‘the gross contract value’) and pays the balance, after the payment of NMW, as payment for the grant of an option to the user (see 7 below). This balance is confirmed in the Option Grant note.
Peak PAYE Ltd makes the secondary payment called the ‘Grantee’s Payments’, as referred to in the Option Grant Agreement and in the Annuity Agreement. These are evidenced in the Option Grantee notifications issued by Peak PAYE Ltd to the users as well as the users’ bank statements, which show an aggregate total in accordance with the net salary per the payroll and the second payment, noted on the Option Grant Note as from Peak PAYE Ltd, the same day. These are paid in one aggregate payment. This secondary element of the payment is made without deductions of tax and NICs. The Grantee’s Payments that Peak PAYE Ltd makes to the users are claimed not to be subject to income tax or NICs.

Stop notice 12

Name of promoter of scheme: PAYE Services Ltd (PSL)
Date of publication: 27 July 2023
Last updated: 10 November 2023
Date stop notice issued: 4 July 2023

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Scheme users sign a Contract for Employment and a Master Advance Agreement with PSL. The Contract for Employment says the scheme user will be paid the National Living wage (NLW) for their services which are provided to 3rd party end clients. The Master Advance Agreement provides that PSL will make advances to the scheme user in its capacity as sole trustee of a settlement known as the ‘PAYE Services Settlement’.
Scheme users provide their services to the end client who makes payment for the work done. PSL then pay the scheme user a single payment which is comprised of 2 elements, the first is a salary at the NLW rate for the hours worked and the second is the advance. Both elements are shown as ‘income’ on the payslip provided by PSL to the user. However, only the salary element is paid after deductions of income tax and National insurance contributions (NICs), whereas the advance element is paid without deductions of income tax and NICs.

Stop notice 13

Date of publication: 10 November 2023
Date stop notice issued: 15 September 2023

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

The scheme user enters an employment contract with Company X who make composite payments to the scheme users for services provided by the user. The first element is a National Minimum Wage (NMW) / National Living Wage (NLW) salary that is subjected to tax and National Insurance Contributions (NICs), and a secondary element described as an ‘advance drawn down’ which is not.
The arrangements can be broken down into the following steps:

the users enter into an employment contract (‘the Employment Contract’) with Company X. The Employment Contract stipulates that the employee will provide services to clients and end users that the company may reasonably require. In relation to the employee’s payment, Paragraph 6 states that the salary will be in line with the Pay Rate which is identified at the at page 3 of the contract. The Pay Rate is defined as ‘A sum per hour equivalent to the national minimum wage or living wage (as applicable) legally in force from time to time’
the users sign an advance deed entitling them to receive advances to be paid at the employer’s discretion
at the same or similar time, the user assigns their contract to Company X who enter a contract with the end client/agency to provide services – usually of a specific person, the contractor they have employed
users provide timesheets for work undertaken for end clients, these are either direct to Company X (via a portal) or possibly via the agency
Company X invoices the end client/agency who pay the full amount to Company X
Company X pay weekly NMW/NLW salary to users through the payroll and issue payslips. These detail the hours worked and show the rate of the NLW (which was £9.50 per hour in 2022 to 2023 and £10.42 per hour in 2023 to 2024)
Company X issue pay statements as well as the payslips and these show the actual hourly rate charged to the agency
Company X pays the secondary payment at the same time as the payment of the net salary and issues advance advice notes which show the advance drawn down amounts. The payments are paid as one aggregate payment
Company X withholds and retains an amount of the figure invoiced to the end client/recruitment agency for the services carried out by the users ‘the gross contract value’. The amount retained by Company X is effectively its fee which the users pay for participating in the arrangements

Stop notice 14

Name of promoter of scheme: Buckingham Wealth Ltd (Incorporated in Belize)
Address of promoter: 1 Orchid Garden Street, Belmopan, Belize
Date of publication: 10 November 2023
Date stop notice issued: 3 July 2023

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

An individual or company who has used a Remuneration Trust (‘the Settlor’) declares that the original trust (the ‘original Trust’ is void ab initio.
The contributions made to the Original Trust (‘the Original Contributions’) are claimed to fall back to the Settlor, or a company claiming to act in a fiduciary capacity for the Original Trust (‘the Fiduciary’), who claims to hold the Original Contribution on a constructive trust.
The Settlor assigns or otherwise contributes the Original Contributions to a new trust (‘the New Trust’).
By assigning or otherwise contributing the Original Contributions to the New Trust the Settlor claims that:

the tax deduction claimed in the accounting period of the Original Contribution can still be claimed and the accounts do not need to be restated in relation to the assignment or new contribution of the Original Contribution to the New Trust
any amounts paid, in whatever capacity, to the Director of the settlor company or to others is not chargeable to tax

Stop notice 15

Name of promoter of scheme: Hive Umbrella Ltd (HUL)
Address of promoter: Adamson House, Towers Business Park, Wilmslow Road, Manchester, M20 2YY
Date of publication: 10 November 2023
Date stop notice issued: 24 March 2023

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

The scheme user enters into an employment contract with HUL. The contract states the user will be paid at the National Minimum Wage (NMW) and may be entitled to ‘Ad hoc Pay Advances’. This ‘advance’ represents an interest free debt (to HUL) which is offset against a future bonus when HUL decide to grant it to the user, eliminating the debt. Advances are made to the user during each payroll cycle for their work, and an administration fee is charged by HUL.
The scheme user undertakes work for an agency/end client and submits timesheets to HUL, who invoice the agency for the work done. The scheme user then receives a single payment from HUL which consists of 2 elements:

the first element is the NMW salary with tax and NICs paid
the second element, described as ‘advance drawn down’ is not taxed

Stop notice 16

Name of promoter of scheme: Olympus Contracting Limited (OCL)
Address of promoter: 63-66 Hatton Garden, London, EC1N 8LE
Date of publication: 7 December 2023
Date stop notice issued: 7 November 2023

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

The arrangement begins with an individual (‘the User’) holding a contract, or about to start a contract, with an end client (‘the End User’) or a Recruitment Agency (the ‘Agency’). The User becomes an employee of OCL who acts as the User’s employer and provides the User’s services to the End User.
OCL enters into an Employment Contract (the ‘Contract’) with the User which provides that the User will receive a salary from OCL paid at the National Minimum Wage or National Living Wage (both referred to hereafter as ‘the Salary’) plus holiday pay. The individual receives the Salary which is taxed through PAYE and a second untaxed payment (‘the Untaxed Payment’) paid into the User’s bank account as a single amount. The Contract includes the ability for OCL to offer additional ‘benefits’ to employees.
The Users provide services to the End Users and complete timesheets, or electronic time recording system as required by the End User. OCL invoices the End User or the Agency for the work done and receives payments. OCL pays Users the Salary, which is shown on their payslips (the ‘Payslip’), the Salary is paid after deduction of Income Tax and National Insurance Contributions (‘NIC’). At the same time OCL pays an Untaxed Payment which is not recorded on the Users’ Payslips.
OCL also issues a Reconciliation Statement (‘Reconciliation Statement’) which show the gross payment received by OCL from the End Users at the full hourly pay rate charged to the End User. The Reconciliation Statement also shows a lower hourly pay rate which is multiplied by the hours worked (to the maximum shown in the contract) to show the amount from which deductions are taken. The net balance represents the Salary which is then carried forward to the Payslip for the pay period on which PAYE is applied.
The additional Untaxed Payment is shown on a separate document called a Withdrawal Statement (‘Withdrawal Statement’).

Stop notice 17

Date of publication: 21 March 2024
Date stop notice issued: 25 October 2023

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

The scheme users enter into an employment agreement with a Maltese company - Company A. The agreement states that unless otherwise specified, wages will be paid at the applicable National Minimum Wage (NMW) or National Living Wage (NLW). The employment agreement refers to potential bonus payments advising that a ‘Discretionary Profit-Sharing Bonus’ may be paid periodically if the user has, in the ‘reasonable opinion’ of Company A, generated sufficient profits to warrant the bonus (Clause 3.3 Employment Agreement).
At the same time, a UK company, Company B, enters into an agreement for services with the end client, or recruitment agency.
Company B accept assignments on behalf of the user and provide confirmation to the agency, specifying the duration of the assignment, the fees payable by the agency and such expenses as may be agreed (Clause 3.3 Agreement for Services).
Company B receives the funds for the services carried out by the scheme users from the recruitment agencies or end clients.
Company A make payment to scheme users, in their role as the employer. They issue payslips to the user showing a deduction of PAYE and employee NIC. A corresponding ‘Pay Statement’ is issued which includes an additional sum described as an ‘Umbrella Advance’. No PAYE Income Tax, nor any National Insurance contributions are deducted and accounted for in respect of the umbrella advance. Both the untaxed umbrella advance and the PAYE wages are paid to the user in a single payment, as confirmed by user bank statements.

Stop notice 18

Name of promoter of scheme: Agile Pay Ltd
Address of promoter: Office 1 Technology House, Newton Place, Glasgow, G3 7PR
Date of publication: 21 March 2024
Last updated: 17 October 2024
Date stop notice issued: 20 November 2023

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

The arrangements involve individuals (‘contractors’) entering into a contract of employment with Agile Pay Ltd (APL). Remuneration under these arrangements is composed of two elements. The first element is a salary at or around the National Minimum Wage (NMW) or the National Living Wage (NLW) rate if applicable. The second element is described as an advance. Tax and National Insurance Contributions (NIC) are not applied to the advance element of the payment made to the user.

A contractor having already obtained work via an agency or directly with an end client approaches APL for it to act as an umbrella company to conduct payroll and invoicing services.
The contractor then enters into a contract of employment with APL. The contract states that wages will be at the NMW rate or the NLW rate if applicable. The contract also provides that employees may receive ‘Ad hoc Pay Advances’ and sets out the conditions for receiving these advances and repayment terms. A ‘Pay Advance’ is described as ‘an amount advanced on account of an accrued entitlement to pay for time already worked’’.
APL invoice the end client of the agency for the contractor’s services.
The payment for the services of the contractor is made by the end client/agency to APL.
APL then make a payment to the contractor. The contractor receives basic pay (the NMW or NLW), a small ‘commission’ and holiday pay which is all included on the payslips (if issued) and accounted for tax and NIC. The net pay on the payslip is included in a larger payment made into the contractor’s bank account. The balance of this payment is a Pay Advance which is not accounted for tax and NIC by APL.

Stop notice 19

Publication deleted: 24 October 2024

Stop notice 20

Date of publication: 21 March 2024
Date stop notice issued: 9 January 2024

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

A contractor having already obtained work via an agency or directly with an end client seeks an umbrella company to conduct their payroll, and therefore enters into a Contract of Employment with Company X. The contract states that wages will be at the National Minimum Wage (NMW) rate or the National Living Wage (NLW) rate if applicable. Para 3.8 onwards of the Contract of Employment explains that employees may receive ‘Ad hoc Advances’ and sets out the conditions for receiving these advances and repayment terms. A ‘pay advance’ is described as an amount accrued on account for time already worked and is specified to constitute a debt due from the employer to Company X.
Company X invoice the end client for the contractor’s services.
The payment for the services of the contractor is made by the end client/agency to Company X.
Company X then make a payment to the contractor. The contractor receives basic pay (the NMW or NLW rate), commission and holiday pay which is all included on the payslips and PAYE and NICs are accounted for. On the same day, the contractor will receive an Advance Advice which will include the amount of the advance received by the contractor. This amount does not get accounted for tax and NICs but is included in the single payment received by the user into their bank account.

Stop notice 21

Date of publication: 18 April 2024
Date stop notice issued: 22 March 2024

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

A user is engaged as an employee with Company X under a contract of employment. The contract of employment states users will be paid at the National Minimum Wage (NMW) or, if applicable, the National Living Wage (NLW)) rate and may be entitled to Ad hoc Pay Advances.
In addition, the user is invited into a bonus scheme.
The user then receives payment from Company X which consists of 2 elements:

the NMW/NLW with tax and National Insurance Contributions (NIC) paid
an ‘advance’, against future bonus payments. The ‘advance’ is not subject to tax or NIC

Stop notice 22

Date of publication: 18 April 2024
Date stop notice issued: 3 April 2024

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

The remuneration received by users that is attributable to the services provided by them to end clients/agencies is artificially separated by Company X into 2 elements.
One of those elements is paid as a salary that is subjected to Income Tax (IT) and National Insurance Contributions (NICs) via PAYE, the other is claimed to not count as employment income and is paid in another manner that is not subjected to IT and NICs.
This secondary element is paid by virtue of an option agreement, sometimes referred to as a ‘benefit in kind’ and therefore not subjected to IT and NICs.
It is HMRC’s view that the total remuneration received by the user is attributable to the services they provide to end clients/agencies and should therefore be subjected to income IT and NICs in its entirety.

Stop notice 23

Name of promoter of scheme: Prime Umbrella Services Limited (PUSL)
Date of publication: 18 April 2024
Date stop notice issued: 25 October 2023

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Scheme Users enter into an employment contract (‘the Employment Contract’) with PUSL. The contract states that wages will be at the National Minimum Wage (NMW) rate or the National Living Wage (NLW) rate if applicable.
PUSL invoices the recruitment agency or end client for the services carried out by the Scheme Users based on the hours worked and the appropriate hourly rate.
PUSL receives the funds for the services carried out by Scheme Users from the recruitment agencies or end clients.
PUSL then make a payment to the scheme users. The scheme users receive basic pay (the NMW or NLW) which is on the payslips and accounted for tax and National Insurance Contributions (NICS). Also, on the same day, a secondary untaxed payment is paid to the users by PUSL and described as a ‘pass through item.

Stop notice 24

Date of publication: 1 August 2024
Date stop notice issued: 10 May 2024

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

A contractor having already obtained work via an agency or directly with an end client seeks an umbrella company to conduct their payroll, and therefore enters into a Contract of Employment with Company X. The contract states that wages will be at National Minimum Wage (NMW) rate or the National Living Wage (NLW) rate if applicable. Para 3.12 onwards of the Contract of Employment explains that employees may receive ‘Ad hoc Advances’ and sets out the conditions for receiving these advances and repayment terms. A ‘pay advance’ is described as an amount accrued on account for time already worked and is specified to constitute a debt due from the employee to Company X.
Company X invoice the end client for the contractor’s services.
The payment for the services of the contractor is made by the end client/agency to Company X.
Company X then make a payment to the contractor. The contractor receives basic pay (the NMW or NLW rate), commission and holiday pay which is all included on the payslips, where PAYE and NICs are accounted for. On the same day, the contractor will receive an Advanced amount together with the basic pay amount. This amount does not get accounted for tax and NICs but is included in the single payment received by the user in their bank account.

Stop notice 25

Date of publication: 1 August 2024
Date stop notice issued: 17 July 2024

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

A property business undertaken by an individual, individuals or in partnership (the ‘Users’) obtain an agreement from a third-party lender for bridging finance to be provided to the property business.
The Users, a limited company of which the Users are directors and the lender enter into a ‘facility agreement’. The amount provided to the business is to extract the capital from the business before the property business is incorporated into the company. The liability to the bridging loan is to be transferred to the company as part of the sale of the assets and liabilities of the company (whereas the existing mortgage liabilities on the properties are not). A fee is due for using the facility and repayment in full is required a short time after the amount is drawn down. The Users certify that the obligations under the loan facility will not breach any existing borrowing contractual agreements.
The bridging loan is drawn down by the individual.
A ‘Sale and Purchase Agreement’ is entered into to substantially sell the property business to a limited company in exchange for shares. The business (the property business run by the Users) includes all the assets and liabilities of the business. Schedule 1 of the agreement outlines the consideration in shares, schedule 2 outlines the properties and their values and schedule 3 outlines the mortgage liabilities and the bridging loan. The agreement specifies that a Trust Deed, Agency Agreement and Contract for Sale are also entered into which regulates the future relationship between the purchaser (the company) and the sellers (the Users) post transfer. The sale and purchase agreement purports to transfer all the assets and liabilities of the business (as outlined in schedule 2 and 3 of the agreement) to the company. However, the mortgage liabilities on the properties are not transferred or satisfied as part of the sale. Instead as a condition of the sale, the company adopts responsibility, in the form of an indemnity, for the servicing and repayment of any mortgages yet to be redeemed. This is achieved through the additional agreements entered into as part of the transfer.
The ‘Trust Deed’ is entered into by the Users as trustees and the company as beneficiary which allows the trustees to hold the legal interest in the properties upon trust for the beneficiary.
The Users (as the mortgage holders) and the company enter into an ‘Agency Agreement’ this appoints the Users as agents for the company for the purpose of making mortgage payments for the properties held in trust and the making and receiving of other payments and receipts in relation to the properties in the trust as required.
The Users as ‘sellers’ enter into a Contract for Sale with the company ‘the purchaser’ dated the same as the sale and purchase agreement, to sell ‘with full title guarantee’ the properties to the company. The completion date will be 28 days after written notice is given by the company to the ‘Sellers’ (or their ‘successors’) that it wishes to complete the sale of a specific property. This is the deferment of the legal title transfer until the end of the existing mortgage contracts or earlier.
The transfer of the business takes place, and the company now holds the beneficial interests in the properties and the indemnity to pay the mortgages and the bridging loan.
The Users, as directors, make a loan to the company of the amount equal to the bridging loan and the company repays the bridging loan it has now become liable for. The bridging loan is eliminated, and directors get a credit into their loan account for the amount loaned to the company from which they are expected to be able to draw tax free.

Stop notice 26

Name of promoter of scheme: Solucionis Limited
Address of promoter: Previous Address – Horton House, Exchange Flags, Liverpool, L2 3PF
Date of publication: 12 September 2024
Date stop notice issued: 30 April 2024

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

A scheme user’s total remuneration for their contracts is separated into 2 elements. One is a salary that has Income Tax (IT) and National Insurance Contributions (NICs) deducted through PAYE. The other is paid in a manner that is claimed to not count as employment income and therefore is not subjected to IT and NICs by the employer. This secondary element is paid by virtue of the purported growth of a share held by the user in an Isle of Man Protected Cell Company (PCC) and therefore not subjected to IT and NICs. It is HMRC’s view that the total remuneration received by the user is attributable to the services they provide to end clients/agencies and should therefore be subjected to income IT and NICs in its entirety.

Stop notice 27

Name of promoter of scheme: 1st Choice Umbrella Ltd (1CU) / Omni Contractors PCC Limited (OCP)
Address of promoter: 1st Choice Umbrella Ltd – Tamworth Enterprise Centre, Corporation Street, Tamworth, England B79 7DN / Omni Contractors PCC Limited – 2nd Floor, Murdoch Chambers, South Quay, Douglas, Isle of Man IM1 5AS
Date of publication: 12 September 2024
Date stop notice issued: 23 December 2023

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Users enter into an employment contract with 1CU. The Contract of Employment stipulates that the employee will work on client assignments. In relation to payment, it states that 1CU will pay the employee (‘the user’) the applicable National Minimum Wage or, if applicable the National Living Wage (NMW/NLW).
At the same time, or shortly afterwards, OCP issue to the user a share in OCP in a unique cell specific to the user.
1CU invoice the recruitment agencies or end clients for the services carried out by the users. This is calculated using the timesheets submitted to 1CU Ltd by the users at the appropriate hourly rate.
1CU receive the funds for the services carried out by scheme users from the recruitment agencies or end clients.
The amount that each user is entitled to be paid is confirmed in the Employment Contract as being in line with the NMW/NLW, although HMRC has seen evidence of payments being made at slightly higher rates. 1CU makes a payment to the user in line with, or slightly above, the NMW/NLW hourly rate. This is confirmed by the payslips and the bank statements of scheme users.
A secondary payment is made to the users by OCP. The secondary payments are said to be made in connection with an increase in the value of the share in the unique cell specific to the user. No PAYE Income Tax is deducted and accounted for in respect of the payment, nor are any National Insurance Contributions (NIC) deducted and accounted for in respect of the payments.
This payment is confirmed in the payslips issued by 1CU and is deemed not to be subject to income tax or NICs.

Stop notice 28

Name of promoter of scheme: Goldfish Umbrella Ltd
Address of promoter: Kemp house, 152-160 City Road, London, EC1V 2NX
Date of publication: 12 September 2024
Last updated: 14 November 2024
Date stop notice issued: 31 July 2024

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

A contractor having already obtained work via an agency or directly with an end client pursues an umbrella company to administer their payroll. Once the umbrella company is found the contractor enters a Contract of Employment with the company, Goldfish Umbrella Ltd. The contract states that wages will be at National Minimum Wage (NMW) rate or the National Living Wage (NLW) rate if applicable. Para 3.8 onwards of the Contract of Employment explains that employees may receive ‘Ad hoc Advances’ and sets out the conditions for receiving these advances and repayment terms. A ‘pay advance’ is described as an amount accrued on account for time already worked and is specified to constitute a debt due from the employee to Goldfish Umbrella Ltd.
Goldfish Umbrella Ltd invoice the end client for the contractor’s services.
The payment for the services of the contractor is made by the end client/agency to Goldfish Umbrella Ltd.
Goldfish Umbrella Ltd then make a payment to the contractor. The contractor receives basic pay (the NMW or NLW rate), commission and holiday pay, which is all included on the payslips, where PAYE and NICs are accounted for. On the same day, the contractor will receive an Advanced amount together with the basic pay amount. This Advanced amount does not have Income Tax and National Insurance Contributions deducted but is included in the single payment received by the user in their bank account.

Stop notice 29

Name of promoter of scheme: Adapt Limited / TGI Payday Limited
Address of promoter: Adapt Limited – 6th Floor, Harbour Court, Lord Street, Douglas, Isle of Man, IM1 4LN / TGI Payday Limited – 145 Grimsby Road, Cleethorpes, England, DN35 7DG
Date of publication: 12 September 2024
Date stop notice issued: 2 May 2024

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

The user of the arrangements (‘Scheme User’) enters into an ‘Employment Contract’ with ‘the Employer’ (Adapt Limited). The Employment Contract provides that the employee will be paid at the National Minimum Wage/National Living Wage (NMW/NLW) rate.
The Scheme User enters into a second agreement with Adapt Limited called a ‘Commercial Loan Agreement’. The agreement provides for Adapt Limited, as lender, to make loans under the terms set out in the agreement, and as set out in the loan repayment schedule to the employee, as the borrower.
The UK based company, TGI Payday Limited enters into an ‘Agreement for Administrative Services’ with Adapt Limited.
TGI Payday Limited contracts with an employment agency (the Employment Business). The agreement provides that TGI Payday Limited will provide the services of an agency worker (a Scheme User) to the Employment Business and that the Employment Business will provide the Scheme User’s services to the end user (the Hirer).
The Scheme User undertakes work for the Hirer and submits timesheets to TGI Payday Limited.
TGI Payday Limited raise an invoice to the Employment Business for the hours worked by the Scheme Users. The Employment Business pays the invoice amount to TGI Payday Limited.
TGI Payday Limited pay most of the invoice total to the Employer, Adapt Limited. Adapt Limited then make a salary payment to the Scheme User at the NMW/NLW rate through the payroll and a second payment under the Commercial Loan Agreement which is not made through the payroll and not subject to tax or National Insurance Contributions (NICs).

Stop notice 30

Date of publication: 12 September 2024
Date stop notice issued: 3 September 2024

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

The arrangements involve individuals providing their services to end clients or agencies through Company X who operate the payroll. The individuals also enter into an agreement with Company Y based in Cyprus where individuals grant Company Y the option to enter an Annuity Agreement in exchange for payments (the Grantee Payments).

The individuals receive payslips from Company X showing Income and Deductions including Tax and National Insurance contributions (NICs). This amount is subsequently reported to HMRC. However, the amount actually paid into the individual’s bank account is greater than the amount shown on the payslip and the difference between these 2 amounts has not been subject to Tax or NIC.

It is HMRC’s view that the amount paid without tax and NIC deductions represents the Grantee Payments but paid by Company X on behalf of Company Y.

It is also HMRC’s view, that the Grantee Payments are also income for the services provided by individuals through Company X and therefore the entire payment should be subject to tax and NIC deductions.

Stop notice 31

Date of publication: 12 September 2024
Date stop notice issued: 29 August 2024

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

The remuneration received by users that is attributable to the services provided by them to end clients/agencies is artificially separated by Company X into 2 elements.

One of those elements is paid as a salary that is subjected to Income Tax (IT) and National Insurance Contributions (NICs) via PAYE, the other is claimed to not count as employment income and is paid in another manner that is not subjected to IT and NICs. This secondary element is paid by virtue of a conditional annuity purchase agreement and is therefore not subjected to IT and NICs.

It is HMRC’s view that the total remuneration received by the user is attributable to the services they provide to end clients/agencies and should therefore be subjected to IT and NICs in its entirety.

Stop notice 32

Date of publication: 12 September 2024
Date stop notice issued: 12 July 2024

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

The user receives an offer of employment from an end client/agency for which they require an umbrella company. In this instance, users are joining Company X (CX) as their chosen umbrella.
The user signs an employment contract with CX which allows them to provide their services to end clients. In relation to payment, it states at section 3.1.2 that CX will pay the employee at the National Minimum Wage/National Living Wage (NMW/NLW). The examples of contracts received by HMRC state that in addition to the NMW/NLW Rate payment they will also be considered for a periodical discretionary profit sharing bonus. There is, however, no explanation of how these are calculated. The contracts also state that the user may be required to spend a week or more sourcing CX new business in the form of future client assignments for the user.
The user also enters an agreement with Company Y (CY) based in Cyprus, under which CY agrees to make payments (‘Grantee Payments’) to the scheme user in consideration for which the scheme user agrees to enter into an Annuity Agreement (contained in a schedule to the agreement). The annuity only becomes payable once CY pay an ‘additional fee of £500 which is expressly stipulated as being for this purpose. The earliest date the annuity can be entered into is the latter of 300 consecutive days during which no Grantee’s Payments are made by CY or the date of the additional payment of £500’. If executed the term of the annuity is 20 years (or earlier if under terms of the agreement) and payments are 10% of the total of all Grantee payments.
Paragraph 3 of the Cypriot agreement identifies that CX and CY are parties to a mutual Service Agreement.
CX enters agreements with end users/agencies which permit users to perform their contracts and permits these end clients/agencies to pay the amounts earned in relation to the services provided by scheme users to CX when invoices are received per below steps. Without such contracts the agencies/end clients would not contract the services of CX employees and steps 6 and 7 below would not be possible.
It is reasonably inferred that CX invoices the end client/agency for the work undertaken by the users.
The end client pays CX for the work undertaken by the users who then pay users and provide payslips which show payments at the NMW/NLW in line with the Employment Agreement. This payment is subject to tax and NI deductions. However, bank analysis shows that the payments made are always higher (at least in the case of analysis of several users’ bank statements) than is declared on payslips/RTI. It is HMRC’s suspicion that these include the Grantee’s Payment made by CX on behalf of CY (no payments appear to have been received by users from CY), however, there is no explicit evidence of such.

Stop notice 33

Name of promoter of scheme: AI Global Workforce Ltd (AIGW)
Address of promoter: Edmund House, 12-22 Newhall Street, Birmingham, B3 3AS
Date of publication: 12 September 2024
Date stop notice issued: 31 May 2024

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Having found suitable work with an End Client via a UK based agency (the Agency), the Contractor is directed to AIGW, to use them as an umbrella company to handle their payroll requirements. The contract signed with AIGW specifies that the Contractor’s rate of pay will be paid at National Minimum Wage (NMW) or National Living Wage (NLW). The contract specifies that the Contractor may receive ‘Ad hoc Advances’, the conditions for the ‘advances’ to be paid, and the repayment terms for the ‘advances’. A ‘pay advance’ is described as an amount accrued on account for time already worked. It is specified as a debt owed by the Contractor to AIGW.
AIGW enter into a contract with the Agency to provide the Contractor’s services.
The Agency enters into a contract with the End Client to provide the Contractor’s services.
Payment is made for the Contractor’s services by the End Client to the Contractor via the Agency and AIGW. When AIGW make the payment to the Contractor’s bank account, it is a single payment consisting of:
- an amount at NMW or NLW which has PAYE operated on it
- an ‘advance’ which is paid without the deduction of tax and NICs

Stop notice 34

Name of scheme: Nova
Name of promoter or supplier of scheme: LWI Services Limited (previously known as Lucentum Wealth International Ltd until 31 October 2018)
Address of promoter: Rodus Building 4th Floor, Road Reef PO Box 765, Road Town, Tortola, British Virgin Islands
Date of publication: 17 October 2024
Date stop notice issued: 13 March 2024

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

A company which has used a Remuneration Trust (‘the Settlor’) declares that the original trust (the ‘Original Trust’) is void ab-initio.
The contributions made to the Original Trust (‘the Original Contributions’) are claimed to fall back to the Settlor, or a company claiming to act in a fiduciary capacity for the Original Trust (‘the Fiduciary’), who claims to hold the Original Contribution on a constructive trust.
The Settlor assigns or otherwise contributes the Original Contributions to a new trust (‘the New Trust’).
By assigning or otherwise contributing the Original Contributions to the New Trust the Settlor claims that:
- the tax deduction claimed in the accounting period of the Original Contribution can still be claimed and the accounts do not need to be restated in relation to the assignment or new contribution of the Original Contribution to the New Trust
- any amounts paid, in whatever capacity, to the Director of the settlor company or to others is not chargeable to tax

Stop notice 35

Date of publication: 17 October 2024
Date stop notice issued: 9 August 2024

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

The arrangements involve individuals providing their services to end clients through Company X. The individuals receive two payments from Company X on the same date. The first payment is salary paid at a rate close to the minimum permitted under the National Minimum Wage Act 1998, with Income Tax and National Insurance Contributions (NICs) deducted. The second payment, described as a ‘Withdrawal amount’ against the individuals company incentive plan report, is paid without the deduction of Income Tax and NICs.

It is HMRC’s position that the whole payment is actually income received in respect of the individual’s services provided through Company X and Income tax and NICs are payable on it.

Stop notice 36

Date of publication: 17 October 2024
Date stop notice issued: 9 October 2024

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

The user receives an offer of employment from an end client/agency for which they require an umbrella company. In this instance, users are joining Company X as their chosen umbrella.
The user signs an employment contract with Company X. The employment contract dictates that the employee will provide services to the end clients. In regards to the employee’s payment, paragraph 3.1.2 of the contract states that the salary is defined as ‘at the national minimum wage (or if applicable, the National Living Wage) rate’.
The user also enters an agreement with Company Y (based in Cyprus) under which Company Y agrees to make payments (‘Grantee Payments’) to the scheme user in consideration for which the scheme user agrees to enter into an Annuity Agreement (contained in a schedule to the agreement). The annuity only becomes payable once Company Y pay an ‘additional fee of £500 which is expressly stipulated as being for this purpose. The earliest date the annuity can be entered into is the latter of 300 consecutive days during which no Grantee’s Payments are made by Company Y or the date of the additional payment of £500’. If executed the term of the annuity is 20 years (or earlier if under terms of the agreement) and payments are 10% of the total of all Grantee payments.
Paragraph 3 of the Cypriot agreement identifies that Company X and Company Y are parties to a mutual service agreement.
Company X enters agreements with end users/agencies which permit users to perform their contracts and permits these end clients/agencies to pay the amounts earned in relation to the services provided by scheme users to Company X when invoices are received per below steps. Without such contracts the agencies/end clients would not contract the services of Company X employees and steps 6 and 7 below would not be possible.
It is reasonably inferred that Company X invoices the end client/agency for the work undertaken by the users.
The end client pays Company X for the work undertaken by the users who then pay users and provide payslips which show payments at the NMW Rate in line with the Employment Agreement. This payment is subject to tax and NI deductions. However, bank analysis shows that the payments made are higher than is declared on payslips/RTI and it is HMRC’s suspicion that these include the ‘Grantee’s Payment’ made by Company X on behalf of Company Y.

Stop notice 37

Date of publication: 17 October 2024
Date stop notice issued: 08 October 2024

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

HMRC suspect that this arrangement is designed to allow the User to provide their services while retaining more money than they would as an employee, as a result of part of the money being treated as an untaxed payment (the ‘Untaxed Payment’). The arrangement begins with the User holding a contract, or about to start a contract, with an End User or a Recruitment Agency (the ‘End User’). The User becomes an employee of Company X who acts as the User’s employer and provides the User’s services to the End User.

COMPANY X enters into an Employment Contract (the ‘Contract’) with the User which provides (clause 3.2) that the User will receive a salary from COMPANY X paid at the National Minimum Wage or National Living Wage (both referred to hereafter as ‘The NMW Rate’) plus holiday pay, with the remaining income of the User ‘added to the User’s UDPS [Unregistered Defined Benefit Pension Scheme]’. There is also a clause in the contract at ‘3.5 Bonus: In addition, you will be considered periodically for a Discretionary Profit Sharing Bonus (DPSB)…’. In practice the individual receives a small salary at or around The NMW Rate which is taxed through PAYE and the Untaxed Payment paid into the User’s bank account as a single amount. It is not clear whether the Untaxed Payment is the UDPS, the DPSB or something else. However, what is clear is that this payment is not subject to income tax nor National Insurance Contributions (NICs).

COMPANY X pays Users The NMW Rate salary, which is shown on their payslips (the ‘Payslip’), the salary is paid after deduction of tax and NIC. At the same time COMPANY X pays an Untaxed Payment which are not recorded on users’ Payslips.

COMPANY X also issues Reconciliation Statements (‘Reconciliation Statements’) which show the gross payment received by COMPANY X from the End-Users together with deductions from the payment for a ‘margin’ being the disclosed ‘fee’, employers’ national insurance contributions, holiday pay (which is paid to the Employee in the month of deduction) and in some cases, pension deductions and the apprenticeship levy. The Reconciliation Statement also show The NMW Rate amount which is multiplied by the hours worked (to the maximum shown in the contract) to show the taxable pay which is then carried forward to the Payslip for the pay period.

The additional Untaxed Payment is shown on a separate document call a Withdrawal Statement (‘Withdrawal Statement’).

Detailed explanation of the steps:

Users are asked to sign the Contract with Company X. The Contract provides that the User will receive a payment equivalent to at least The NMW Rate with any additional payment being added to the User’s UDPS [Unregistered Defined Benefit Pension Scheme]. Other benefits are offered to the User.
Users must record time worked on a timesheet or on an electronic time recording system as required by the End User, these are provided either direct to Company X or via the Agency. The User provides service to the End User and completes timesheet to allow Company X to know the amount of money due from the End User or Agency. Company X will then raise an invoice for the User’s service based on the hours worked and the hourly rate which will be sent to the End User or the Agency for payment.
Company X pays the Salary, which is shown on the User’s Payslip. The Salary is paid to the User after deduction of income tax and NIC.
At the same time as making the Salary payment, Company X pays the Untaxed Payment, this payment is not shown on Users’ payslips. The amounts received as the Salary and Untaxed Payments are paid to the User’s bank account. Company X provides a Withdrawal Statement to the User which shows out the Untaxed Payment.

Stop notice 38

Date of publication: 17 October 2024
Date stop notice issued: 9 October 2024

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

The remuneration received by users that is attributable to the services provided by them to end clients/agencies is artificially separated by Company X into two elements. One of those elements is paid as a salary that is subjected to Income Tax (IT) and National Insurance Contributions (NICs) via PAYE, the other is claimed not to count as employment income and is paid in another manner that is not subjected to IT and NICs. This secondary element is paid by virtue of a conditional annuity purchase agreement, and therefore not subjected to IT and NICs. It is HMRC’s view that the total remuneration received by the user is attributable to the services they provide to end clients/agencies and should therefore be subjected to income IT and NICs in its entirety.

Stop notice 39

Date of publication: 14 November 2024
Date stop notice issued: 24 October 2024

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

The arrangement begins with an individual (‘the User’) holding a contract, or about to start a contract, with an end client (‘the End User’) or a Recruitment Agency (‘the Agency’). The User becomes an employee of Company X who acts as the User’s employer and provides the User’s services to the End User.
Company X enters into an Employment Contract (‘the Contract’) with the User which provides that the User will receive a salary from Company X paid at the National Minimum Wage or National Living Wage (both referred to hereafter as ‘the Salary’) plus holiday pay. The individual receives the Salary which is taxed through PAYE and a second untaxed payment (‘the Untaxed Payment’) paid into the User’s bank account as a single amount. The Contract includes the ability for Company X to offer additional ‘benefits’ to employees.
The Users provide services to the End Users and complete timesheets, or electronic time recording system as required by the End User. Company X invoices the End User or the Agency for the work done and receives payments. Company X pays Users the Salary, which is shown on their payslips (‘the Payslip’), the Salary is paid after deduction of income tax and national insurance contributions (NICs). At the same time Company X pays an Untaxed Payment which is not recorded on the Users’ Payslips.
Company X also issues a Reconciliation Statement (‘Reconciliation Statement’) which show the gross payment received by Company X from the End Users at the full hourly pay rate charged to the End User. The Reconciliation Statement also shows a lower hourly pay rate which is multiplied by the hours worked (to the maximum shown in the contract) to show the amount from which deductions are taken. The net balance represents the Salary which is then carried forward to the Payslip for the pay period on which PAYE is applied.
The additional Untaxed Payment is shown on a separate document called a ‘Withdrawal Statement’.

Stop notice 40

Name of promoter of scheme: Astra Limited / TGI Payday Limited
Address of promoter: 6th Floor, Harbour Court, Lord Street, Douglas, Isle of Man, IM1 4LN / 145 Grimsby Road, Cleethorpes, England, DN35 7DG
Date of publication: 14 November 2024
Date stop notice issued: 16 July 2024

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

The user of the arrangements (‘Scheme User’) enters into an ‘Employment Contract’ with ‘the Employer’ (‘Astra Ltd’). The Employment Contract provides that the employee will be paid at the National Minimum Wage (NMW) and National Living Wage (NLW) rate.
The Scheme User enters into a second agreement with Astra Ltd called a ‘Commercial Loan Agreement’. The agreement provides for Astra Ltd, as lender, to make loans under the terms set out in the agreement, and as set out in the loan repayment schedule to the employee, as the borrower.
A UK based umbrella company, TGI Payday Ltd, enters into an ‘Agreement for Administrative Services’ with Astra Ltd.
TGI Payday Ltd contracts with an employment agency (‘the Employment Business’). The agreement provides that TGI Payday Ltd will provide the services of an agency worker (a Scheme User) to the Employment Business and that the Employment Business will provide the Scheme User’s services to the end user ‘the Hirer’.
The Scheme User undertakes work for the Hirer and submits timesheets to TGI Payday Ltd.
TGI Payday Ltd raise an invoice to the Employment Business for the hours worked by the Scheme Users. The Employment Business pays the invoice amount to TGI Payday Ltd.
TGI Payday Ltd pay most of the invoice total to the Employer, Astra Ltd. Astra Ltd then make a salary payment to the Scheme User at the NMW/NLW rate through the payroll and a second payment under the Commercial Loan Agreement which is not made through the payroll and not subject to tax or National Insurance Contributions (NICs).

Stop notice 41

Date of publication: 14 November 2024
Date stop notice issued: 5 November 2024

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

A user is engaged as an employee of Company X under a contract of employment. The contract states that users will be paid at National Minimum Wage (NMW), or if applicable, National Living Wage (NLW) and may be entitled to ad-hoc pay advances.
Employees are also invited to enter a bonus scheme.
Company X pays the user. The payment consists of 2 elements:

the NMW/NLW with Income Tax (IT) and National Insurance Contributions (NICs) deducted
a secondary payment which has been referred to by the company as a ‘loan’, ‘bonus’ and ‘advance’. This element is not subjected to IT and NICs. The secondary payment is more than the amount subjected to IT and NICs

Question 2

2.  If you’re involved in a tax avoidance scheme

Accepted Answer

If you are involved in any of the tax avoidance schemes shown on this page and are not already talking to HMRC about your tax position, you should contact HMRC as soon as possible. There is more information about how to do this. You can also report a tax avoidance scheme to HMRC.

Question 3

3.  Information about stop notices

Accepted Answer

Stop notices are one of the ways in which HMRC tackle tax avoidance and those responsible for promoting it.

The main aim of issuing stop notices is to reduce the number of tax avoidance schemes that are being marketed. This makes it harder for people to get caught up in them.

When HMRC issues a stop notice to a promoter, it means:

the promoter who receives the notice must stop selling the specified scheme
the promoter who receives the notice must also pass a copy of it to certain associated persons, who are also subject to the stop notice and must also stop selling the specified scheme
all those persons subject to the notice must inform HMRC of all the people they have promoted the scheme to and any they continue to promote it to
the persons subject to the stop notice must inform all clients and intermediaries that they are subject to a stop notice, what this means, and provide them with a copy of the stop notice

If a promoter fails to comply with a stop notice they can face penalties of up to £100,000 which can increase to up to £1 million in certain circumstances.

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1. Current list of tax avoidance schemes subject to a stop notice

Stop notice 1

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 2

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 3

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 4

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 5

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 6

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 7

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 8

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 9

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 10

Stop notice ceased to have effect

Stop notice 11

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 12

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 13

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 14

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 15

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 16

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 17

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 18

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 19

Stop notice 20

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 21

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 22

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 23

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 24

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 25

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 26

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 27

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 28

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 29

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 30

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 31

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 32

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 33

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 34

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 35

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 36

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 37

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 38

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 39

Details of any arrangements or proposal for arrangements promoted by the person that meet the description specified in the notice

Stop notice 40