HMRC has warned that two more umbrella companies, Pay Rec and Prime Umbrella Services, are paying agency staff without income tax and National Insurance
The umbrella agencies hire the staff under dubious contracts and leave the workers exposed to the risk of HMRC investigations.
There are now over 60 umbrella companies on the list of agencies paying staff tax free but so far none of the businesses have been taken to court by HMRC to strike them off or wind up their activities.
Pay Rec is a Manchester based business which was set up in October 2021 with a sole director Daniel Asad-Hamed. The agency’s micro accounts’ filing for year end October 2022 on Companies House claims that it has 97 staff and current assets for the year of £610,326. He is also a director of two other companies, TMT Consultancy and Unity Services Marketing.
People hired for work through Pay Rec enter into an employment contract with the agency and are told they will be paid with a mix of national minimum wage with tax deducted and a tax-free advance bonus payment. On the company’s website it states that their ‘service is for contractors and freelancers who appreciate communication and a straightforward service. We engage with your agency and clients invoicing for the work you’ve done and taking care of all your tax and National Insurance obligations’.
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