Returning NHS Staff ‘Targeted’ by ‘Tax Avoiding Umbrella Schemes’

NHS staff – specifically those returning to help with the UK’s Coronavirus response – are being targeted by promoters of tax avoidance schemes, HMRC have said. Earlier this week, HMRC issued caution against associating with such schemes, as well as guidelines regarding what to look out for.

What HMRC have said:

According to HMRC, the schemes have similar features, which in many cases include using a rogue umbrella offering, with wages in two payments. “The first payment is declared as earnings and will go through the ‘umbrella company’ payroll, often at around National Minimum Wage levels or a flat rate payment.”

“The second payment, that the ‘umbrella company’ will claim is not taxable, may be described as a loan, annuity, shares, a capital advance involving mutual, joint or co-ownership, or a payment derived from a revolving line of credit facility, or some other non-taxable form.”

The common thread between these schemes is the “attempt to disguise the true level of your earnings.” Such illegitimate, non-compliant profiteering is the type of thing we’ve been warning against for years.

HMRC takes tax avoidance schemes like this extremely seriously, particularly when the country’s finances are experiencing such testing times. So, if you think you’re currently using one of these schemes, it’s strongly advisable to leave it as soon as possible. Likewise, if you’ve recently signed up, contact HMRC via this email address: To find out more about how to identify a tax avoidance scheme, click here.

What to look out for:

As umbrella companies, we’re all bound by the same regulatory guidelines. So, if your potential provider is making promises such as ‘receipt-less expenses’ or conspicuously high take-home pay (80-85% in some instances), alarm bells should be ringing.

If you’re asked to sign agreements to receive loans, advances, shares, annuities or anything else not relevant to your work, you should consider this a red flag.

The burden of risk is yours. So, whether you are complicit in the tax avoidance of these schemes or not, you could end up owing tax and interest, as well as incurring the ‘umbrella company’s’ fees. It’s you who is culpable for any unpaid tax and therefore stands to be investigated – not your umbrella company.
In short, compliance is essential. Do your due diligence and choose an umbrella provider that’s audited, accredited and has your best interests at heart.

To find out more about Danbro’s umbrella company, and our exclusive benefits such as the Danbro One pension scheme and BUPA Cash Plan, visit Or, to work out your take home pay today, you can use our free Contractor Calculator.

Blog written by
Sam Wright
Marketing Manager at

Sam Wright is Danbro’s Marketing Manager. He produces regular content and feature articles on our digital and non-digital channels – and social platforms – for the Danbro Group and its subsidiaries, as well as having responsibility for the Company’s internal and external communications.

His background is in Journalism and Creative Writing, having previously contributed to publications such as The Daily Post, The Lancashire Evening Post, and The Blackpool Gazette.

He is a keen swimmer and avid Manchester United fan (but don’t hold that against him), and he lives in Lancashire with his wife, Sarah.

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