{"id":22389,"date":"2022-09-08T14:05:13","date_gmt":"2022-09-08T14:05:13","guid":{"rendered":"https:\/\/smh.group\/?p=22389"},"modified":"2022-09-08T14:05:13","modified_gmt":"2022-09-08T14:05:13","slug":"the-rise-of-mini-umbrella-company-fraud","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/the-rise-of-mini-umbrella-company-fraud\/","title":{"rendered":"The rise of mini umbrella company fraud"},"content":{"rendered":"

The rise of mini umbrella company fraud continues to concern HRMC which has recently updated its guidance for businesses that either place or use temporary labour. Mini umbrella companies can be used to abuse the VAT flat rate scheme and the national insurance contribution (NIC) employment allowance.<\/strong><\/p>\n

The VAT flat rate scheme can only be used if a business\u2019s turnover is no more than \u00a3150,000, and the NIC employment allowance covers the first \u00a35,000 of employer NIC liability each tax year.<\/p>\n

Fraud<\/strong><\/h2>\n

Mini umbrella company fraud is where multiple limited companies are created, with only a small number of temporary workers employed by each one.<\/p>\n

Businesses should be aware of the potential dangers in their labour supply chain \u2013 apart from the impact on reputation, the business\u2019s workers may end up receiving less than they are entitled to.<\/p>\n

Workers are often unaware of the arrangements, may not even know who their employer is, and might be regularly moved around between different mini umbrella companies. The use of the mini umbrella company model can mean the loss of some employment rights.<\/p>\n

Warning signs<\/strong><\/h2>\n

Mini umbrella companies will normally be low down in the supply chain, so it can be challenging to spot them. Warning signs include:<\/p>\n