A London based umbrella company targeting contractors has been promoting tax avoidance schemes using untaxed bonuses and advances
Emmanuel Forkuoh, sole director of Contractor Bureau Limited (CBL), has been called out for running tax avoidance schemes whereby workers were paid untaxed bonuses and advances to avoid tax.
Contractor Bureau Limited was set up in May 2022 and according to micro company accounts filed at Companies House last month, the business reported that it had 68 staff in February 2024 with current assets of £460,580 with £457,485 in outstanding creditors for year end May 2023.
, He is also sole director of two other companies, including GUW Consultancy Services, which is registered to provide HR services.
The agency website states that it makes ‘all of the appropriate deductions’ and acts as a go-between with the contractor and the end client or recruitment agency ‘reviewing contract and billing terms’.
However, HMRC has added the company to the list of named avoidance scheme promoters and enablers.
Scheme users are employed by Contractor Bureau and provide services to end clients. As part of their contract with the umbrella company, they have to sign up to a bonus arrangement and then the agency pays advances to users on the bonus pot.
In effect they are paid in two parts, firstly a salary with tax and national insurance contributions (NICs) deducted, and the second element is an ‘advance’ without tax and NICs deducted.
Contractor Bureau claims that the advances are repaid wholly or partly, as bonus payments are made at some time in the future.
HMRC said ‘the salary and advances paid to employees of CBL should be subject to tax and NICs’.
Detailed commentary on the reasons why these schemes are tax avoidance is set out in HMRC Spotlight 60.
In a warning to users of these schemes, HMRC said: ‘You are responsible for your own tax affairs and for paying the correct amount of income tax and national insurance contributions.
‘Most tax avoidance schemes simply do not work and anyone who uses them is at risk of ending up with a large tax bill. You may also find that the umbrella company has deducted a fee (this may be called a margin) from your earnings for using their services, which could be higher than the standard fees. Any tax you owe will be in addition to this.’