New rules are included in the Finance Bill 2014, going through Parliament at the moment to stop Non-UK umbrella companies avoiding national insurance and tax on their agency workers.

Agencies based outside of the UK with no presence in the UK may not be liable for employer’s national insurance.  In addition some are not making the required employee national insurance or income tax deductions or making the required monthly returns of information to HMRC.

The new rules

The new rules will pass the responsibility for deducting PAYE and national insurance back to the UK  (usually the UK agency that has contracted with the end client).

If you have been receiving your agency income via an offshore umbrella company without the deduction of UK tax and national insurance this should have changed from 6 April 2014.

If your UK agency is claiming that tax and national insurance is not due on your agency income then you need to check the “false self-employment” rules.

If you would like help understanding the offshore umbrella rules or the “false self-employment” rules then contact Clearways Accountants for a free consultation on 01737 244298 or via the contact form below.