Employment Agencies: Tax Avoidance
The question
To ask the Chancellor of the Exchequer, what assessment she has made of the potential role of recruitment companies in the use of disguised remuneration tax avoidance schemes.
Answered by James Murray
The Government is committed to tackling tax avoidance and is consulting on a package of measures, including potential new criminal sanctions, to facilitate swifter and stronger action against those who own or control promoter organisations.
The Government also announced action at 2024 Autumn Budget to tackle tax avoidance by umbrella companies. Legislation, effective from April 2026, will be introduced to make recruitment agencies using umbrella companies legally responsible for accounting for PAYE on workers’ pay. Where there is no agency in the supply chain, this responsibility will fall to the end client. This along with the measures on promoters will help prevent disguised remuneration in the future.
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