HMRC tax disputes in 2026

HMRC’s focus on tax avoidance and disguised remuneration schemes remains high in 2026, with increased use of PAYE Regulation 80 determinations, naming of promoters and stop notices that force schemes to cease marketing immediately.

The government has responded to the independent review of the loan charge published in 2025, and HMRC is expected to issue detailed guidance setting out a new settlement opportunity for those with outstanding loan charge liabilities. At the time of writing, final operational guidance has not yet been published.

Taxpayers and directors should assume continued close scrutiny of umbrella‑company models, historic ‘loan’ arrangements and other disguised remuneration schemes – and prepare for swift action by HMRC.

What we are seeing now

HMRC is issuing more Regulation 80 determinations to employers where tax should have been deducted or accounted for under PAYE, including for ‘notional payments’ typical of disguised remuneration arrangements. These determinations are made to HMRC’s best judgment, treated like assessments and actively pursued.

HMRC’s promoter‑disruption work has intensified, using Finance Act 2022 powers to publish details of suspected promoters, their directors and the arrangements, and to issue stop notices requiring an immediate halt to marketing. HMRC’s live list of stop notice schemes was updated in April 2026 and continues to expand.

How HMRC currently challenges avoidance

• Regulation 80 determinations: HMRC can determine tax due from an employer that hasn’t deducted or accounted for PAYE, including on notional payments, and recover it as if assessed. Appeals lie as for income tax assessments
• Discretion to bypass the payer: in avoidance cases (for example, offshore contractor loans), HMRC may direct that it’s unnecessary or inappropriate for the payer to comply with PAYE. This can remove any PAYE credit for the worker. The Court of Appeal has upheld the use of this discretion to recover unpaid tax from other parties and its retrospective application
• Enquiries and closure: HMRC can issue partial closure notices (PCNs) to conclude discrete matters within an enquiry. Where a conclusion changes the tax due, the PCN must state this and make the corresponding quantified amendment to the return. HMRC should continue the enquiry until the amount can be calculated.

Schemes HMRC is targeting

HMRC’s regularly published lists and stop notices show a continued focus on umbrella‑company and contractor models that split remuneration into a small, taxed wage and a larger untaxed element. These are commonly labelled ‘loans’, ‘advances’, ‘grantee payments’ under option or annuity constructs or ‘cell company growth’ payouts. HMRC’s view is that the full amount is taxable as employment income and subject to PAYE and NICs.

Recent stop notices and naming entries include:

• Langan Scott and Co Limited (users joining Langan Scott and Co Limited (LSCL) to use its services as an umbrella company)
• Nova (used a remuneration trust)
• Protean Ltd (national minimum wage accounting for tax and NICs, with a secondary untaxed payment described as an ‘allotment gain’)
• Flex Payroll and Accounting Services Ltd (umbrella company with national minimum wage and a pay advance constituting debt to Flex Payroll).

HMRC’s list is updated regularly and isn’t exhaustive. Absence from the list doesn’t imply that a scheme is effective.

Who pays – employer, worker or director?

The starting point is that the employer is liable to deduct and pay PAYE. HMRC can enforce this through Regulation 80 determinations, including for notional payments where cash deduction wasn’t possible.

In defined circumstances, HMRC can transfer liability to individuals:

• Regulation 72: where an employer took reasonable care and made a good‑faith error, or where an employee knew the employer wilfully failed to deduct tax, HMRC may direct that the employer isn’t liable for the ‘excess’. The amount can then be pursued from the employee through self‑assessment
• Regulation 81: if a Regulation 80 determination becomes final and remains unpaid, HMRC may direct that the employer isn’t liable where the worker knew of wilful under‑deduction, or where the unpaid amount represents tax the employer should have accounted for on notional payments. Recovery again shifts to the worker.

Separately, HMRC can publish promoter and director details and issue stop notices under the Finance Act 2022 to deter participation and speed up compliance.

Managing HMRC enquiries and notices

• Check the notice is valid and quantified: partial or final closure notices must state HMRC’s conclusions and either confirm that no amendment is required or make the specific amendment that gives effect to those conclusions. Where the tax changes, the amended amount must be shown in the notice itself
• Preserve appeal rights and cash‑flow protection: PCNs and final closure notices carry rights of appeal to the tribunal against both conclusions and amendments. Postponement may be available where amounts are disputed
• Anticipate the collection route: where PAYE is unpaid, expect Regulation 80 determinations against the employer and, in some cases, directions transferring recovery to workers under Regulations 72 or 81 or via HMRC’s section 684(7A) discretion, which removes PAYE credit.

How we can help

If you’re a liquidator or administrator, we can test HMRC’s determinations and closure notices, manage settlement and appeals and engage with HMRC on time‑to‑pay to stabilise the estate.

If you’re a director, we can respond to HMRC information requests, assess exposure under Regulations 72 or 81 and section 684(7A) and negotiate settlement or time‑to‑pay, including for historic loan‑based remuneration.

If you’re a contractor or employee, we can review umbrella‑company arrangements, challenge HMRC decisions and manage settlement options in light of forthcoming loan charge guidance.