Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he plans to take steps to ensure that people who were employed by umbrella companies in the 2020-21 tax year do not engage in tax avoidance.

The Government and HMRC will continue to tackle those who market and sell tax avoidance schemes. Whilst many umbrella companies are compliant with the tax rules, HMRC take action against those that are not, including those involved in tax avoidance.

HMRC have issued a range of communications to inform taxpayers who use umbrella companies and help them understand the potential risks. The communications include:

• a tax avoidance awareness campaign in 2020, that was refreshed in November 2021, which advises how to spot and steer clear of avoidance schemes: https://taxavoidanceexplained.campaign.gov.uk/

• guidance for agencies using umbrella companies: https://www.gov.uk/guidance/agencies-and-other-businesses-using-umbrella-companies-who-may-be-operating-avoidance-schemes

• guidance for individuals working through an umbrella company: https://www.gov.uk/guidance/working-through-an-umbrella-company

Further to this, on 30 November 2021, the Government published a Call for Evidence on the umbrella company market, inviting views on the role that they play in the labour market and the ways in which they interact with the tax and employment rights systems.