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The City’s Purple Pay called out by HMRC for promoting tax avoidance

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The City’s Purple Pay has been named and shamed by HM Revenue and Customs (HMRC) for promoting tax avoidance schemes.

The taxman has revealed the names of companies which have promoted schemes to avoid paying tax for the first time today, warning users that they could face “large tax bills” unless they withdraw from them.

Purple Pay, based on Gracechurch Street, has been recommending its Equity Participation Scheme to customers, which HMRC has advised against.

Another firm based near Manchester, Foerster Chambers, has also been called out for its Absolute Outsourcing scheme.

Both schemes involve customers agreeing to employment contracts which sees them paid as contractors on National Minimum Wage, with the remainder of their wages being paid through a loan in a bid to avoid National Insurance and Income tax.

HMRC has not published its complete list of all tax avoidance schemes, promoters or suppliers, but the taxman said it would regularly update the list with more names in the future.

“These schemes are cynically marketed as clever ways to pay less tax. The truth is they rarely work in the way the promoters claim and it’s the users that end up with big tax bills,” director of counter avoidance at HMRC said.

“New legal powers allow us to name promoters and the schemes they peddle much faster, and this announcement is just the first step. But we need the public to be vigilant, and that’s why we’re also helping people identify, and steer clear, of these schemes through our Tax Avoidance – Don’t Get Caught Out campaign.”