HMRC Gives Guidance on Proposed UK Umbrella Company Tax Changes

The UK tax authority Wednesday issued guidance on a proposed law to tackle tax avoidance in the temporary-labor market.

Recruiters or end clients would be jointly liable for unpaid payroll taxes by so-called umbrella companies—agencies used by businesses to pay temporary workers— under the July proposal.

His Majesty’s Revenue and Customs clarified it doesn’t matter which party pays or how much each party pays “as long as the amount is paid in full,” in its Wednesday guidance.

Recruitment agencies would have joint and several liability for payroll taxes, or PAYE, if umbrella companies don’t pay up, according to the draft ...