In a letter to the Treasury, members of the House of Lords Economic Affairs Finance Bill Sub-Committee expressed serious concerns that the extension of the off-payroll rules to the private sector is resulting in greater numbers of people using umbrella companies; and increasing the risk that some individuals, particularly those on low incomes, will become involved with rogue umbrella companies associated with tax avoidance. ‘Paradoxically, this appears to substitute one form of tax avoidance for another,’ the Lords warned.

‘This is highly regrettable, given that the purpose of the off-payroll rules is to curb tax avoidance,’ the Lords’ letter said. ‘While we welcome the call for evidence on umbrella companies, and the work HMRC has done to counter rogue umbrella companies, we believe that this work needs greater urgency.’

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