HMRC are urging businesses to look out for the use of mini-umbrella companies (MUCs) to pay contractors supplying their labour via agencies and other intermediaries.
HMRC have identified criminals creating a series of MUCs in order to claim the NIC employment allowance of £4,000 for each company. The company is then struck off permitting the criminals to potentially avoid paying thousands of pounds of employers’ NICs, as well as avoiding the VAT structure.
Using such companies puts you at risk of becoming liable for unpaid taxes and NICs.