-
![Modern office]()
Disguised employment
Where workers are paid by their employer via an intermediary, to reduce the employer’s tax liability by masking the “contractor’s” de facto employee status. Some contractors are told to register as self-employed, when they are, in reality, employees. IR35 “off-payroll” legislation has been created to combat this.
-
![Five pound note]()
Director’s loans
Director’s loans are perfectly legal and many are paid back. However, in some cases, limited company directors receive some of their income via company loans, but don’t repay them to the company, often they’re simply written off.
-
![paper money]()
Contractor loan schemes
As explained on GOV.UK, a contractor is “paid in the form of a loan from a trust or company, sometimes referred to as a remuneration trust”, not directly from the company they’re working for, because “it’s diverted through a chain of companies, trusts or partnerships”. In reality, such income is taxable.
-
![Coconut trees island]()
Offshore consultancy
Where a business or individual pays an offshore company for consultancy work, with the fees amounting to all or most of the profit made by the business or individual, who then receives the money back via loans or business expense payments.
-
![Payroll. Text in light box]()
Hiding income
Deliberately failing to report or under-reporting business income to HMRC, which can include doing jobs for cash, with no invoices or receipts given to customers (or VAT charged in some cases).
-
![Boat]()
Offshore tax havens
Hiding money, shares or other assets in a bank account in an offshore tax haven, such as the Cayman Islands, Bahamas, British Virgin Islands or Panama, so that tax is not paid in the UK.
-
![Woman working on laptop top view]()
Expense abuse
This can include misreporting to HMRC personal expenses as tax-deductible business expenses (eg fuel costs or other vehicle-related expenses). In other cases, expenses may be invented or inflated to reduce tax bills.
-
![Twenty pound banknotes in man's hands]()
Cash payments
Made to employees, for some or all work, to avoid having to pay Income Tax and National Insurance contributions (both employer and employees). Hospitality staff not declaring tips is another everyday example of tax evasion.
Brought to you by:
Sage
Sage Business Cloud Accounting is online accounting software that provides anytime, anywhere access to essential small business tools. Its features help you manage cash flow and send and track invoices, all through the cloud or via a mobile app.
Get limited time offer 
