Another Name Added to HMRC’s Tax Avoidance List: What the Nova Trust Warning Means for Employers
HMRC has added another name to its published list of tax avoidance schemes: Buckingham Administration Co. Ltd, a company incorporated in Belize. It’s a small update on paper, but it’s a useful reminder of a pattern that keeps resurfacing in one form or another, and one that occasionally lands on an employer’s doorstep rather than staying neatly confined to individual tax returns.
How the scheme is said to work
According to HMRC, people using the scheme make contributions to offshore trusts, such as Buckingham Administration Co. Ltd Nova Trust 1 or GCWealth Administration LLC Nova Trust 1, and claim these as deductible expenses. Funds are then passed to company directors or self-employed individuals, dressed up as loans or fiduciary claims, with no Income Tax or National Insurance paid along the way.
The scheme reportedly includes a clause stating that any HMRC enquiry will cause the trust to be void from the outset. HMRC firmly disputes that this has any legal effect, and points out that open enquiries remain valid regardless of what the scheme’s paperwork claims.
Where this fits with HMRC’s wider position
HMRC treats these Nova Trust arrangements as a continuation of the Remuneration Trust arrangements it already flagged under the Finance Act 2022, and recent tribunal decisions have supported HMRC’s interpretation, referenced under Spotlight 61 on disguised remuneration trusts. In practice, that means contributions aren’t treated as allowable deductions, and money received through the scheme is taxable as earnings, with the tax bill (and often penalties and interest) falling on the individual who used it.
Why this matters for employers and HR teams
These schemes are rarely marketed to a business directly. They tend to reach people through promoters targeting contractors, higher earners, or anyone looking for a more “tax-efficient” way to be paid, sometimes via an umbrella company or intermediary that isn’t what it first appears to be. That’s exactly why payroll and HR teams are worth keeping in the loop.
If you engage contractors, work with umbrella companies, or have employees who’ve mentioned an arrangement that sounds like it reduces their tax bill more than seems plausible, it’s worth a conversation. Being named on HMRC’s list doesn’t stop a promoter operating, but it does mean anyone using the scheme is very likely to face a tax bill eventually, often years after the event and with penalties attached.
Warning signs worth flagging to your teams
- Any arrangement that pays a large proportion of income as a “loan” that’s never expected to be repaid.
- Promises that a scheme is fully HMRC-compliant or has counsel’s opinion behind it, without independent verification.
- Umbrella companies or intermediaries offering noticeably higher take-home pay than competitors for the same assignment.
How Pecunia Pro can help
- Reviewing how contractors and umbrella arrangements are set up across your workforce.
- Helping you put together a short staff briefing on recognising and avoiding disguised remuneration schemes.
- Making sure your own payroll processing stays firmly on the right side of HMRC’s rules, so this is one risk you don’t have to think about.
Want help getting ahead of this? Call us on 020 8143 1529 or email info@pecuniapro.co.uk and we’ll talk it through.