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As most people involved in the contract market will know, the Off-Payroll in the Private sector (IR35) legislation was delayed in April 2020 due to the Covid-19 pandemic but, sadly, is due to go live in April 2021. One thing that this legislation will spawn, as the Off-Payroll in the Public Sector did in 2017, is a raft of tax avoidance schemes that will appear to be legitimate but aren’t. Unscrupulous operators will set up what will appear to be honest and lawful umbrella companies but will promise a take-home pay rate of 80 or 90% of gross pay. As always, anything that appears too good to be true is either not true, or illegal! The most likely way they will do this is to convert your income into a ‘loan’ and use this as a method to avoid paying National Insurance and Tax. However, these schemes are not legal and HMRC will close them down and come after you for underpaid tax – it is likely that you will end up paying more than you should have done in the first place. Note that some of these schemes will claim to be HMRC approved – HMRC does not approve tax avoidance schemes. Be wary of any agency that insists you use a certain umbrella or scheme in order to secure a role, and don’t presume that just because a fellow contractor uses the scheme that it is safe – they may have an incentive to get you on the scheme or may not be aware themselves of the huge risk and liability they face. A reputable agency is likely to ask you to only use an FCSA approved umbrella as this will give all parties protection in knowing that it is acting lawfully. Make sure you do your research and don't believe anything that looks too good to be true! We can supply you with details of a number of FCSA approved umbrella companies and are happy for you to decide which one to use.