What is tax avoidance?

If you’re a contractor, an agency worker, or work through an umbrella company, check how you’re paid to make sure you’re not involved in tax avoidance.

Find out how to spot the signs, report avoidance, or get help leaving or reporting a tax avoidance scheme.

What is tax avoidance?
Tax avoidance is when people bend the rules of the tax system to try to pay less tax than they should.

Spotting tax avoidance is straightforward, even though you might think it is difficult to spot, or that you need to be an expert.

Read our quick guide to spotting signs of tax avoidance and how to protect yourself from them.

Understanding how you’re being paid is the best way to make sure you don’t get caught up in tax avoidance – this applies to people in PAYE as well as Self Assessment.

Checking your payslips and contractual arrangements will help you confirm you are paying the right amount of Income Tax and National Insurance contributions, so you do not get an unexpected tax bill later.

Things to look out for include:

receiving more money in your bank account than what is shown on your payslip
receiving untaxed payments like loans or capital advances
The money you receive in your bank account should match the net pay on your payslip. To understand more about what your payslip should look like read our payslip guide.

You can also use this risk checker to check whether your current contract could involve tax avoidance.