HMRC Names an Agency for Tax Avoidance — But Will Anything Really Change?

HMRC has taken a highly visible step in its ongoing battle with tax avoidance in the contractor supply chain by formally naming Remedy Recruitment Group on its list of promoters, enablers and suppliers of tax avoidance schemes. It is a move that has been widely reported as unprecedented — and in one sense, it is. Remedy appears to be the first recruitment agency to be explicitly named on HMRC’s avoidance list, rather than an umbrella company or payroll provider operating behind the scenes.

But while the headlines suggest a decisive crackdown, the reality is more nuanced. This case tells us far more about the limitations of regulation and enforcement than it does about a new era of control — and it certainly should not be confused with the arrival of Joint and Several Liability (JSL), which has not yet begun.

To understand why, it’s important to look closely at what HMRC is actually alleging, and what the likely consequences really are.

What HMRC Says Remedy Was Doing

According to HMRC’s published entry under the Finance Act 2022, Remedy’s inclusion on the avoidance list is linked to its alleged involvement in a disguised remuneration-style arrangement connected to Aura PAYE Limited, a payroll intermediary now in liquidation.

HMRC’s position is that Remedy paid funds to Aura PAYE Limited for contractor labour. Aura PAYE then routed those funds through a network of umbrella companies — many of which are also now in liquidation — which paid workers using a split-pay structure. Under this model, workers received:

• A low taxable salary, typically at or around National Minimum Wage or National Living Wage, subject to PAYE and NICs

• A second payment, paid without Income Tax or National Insurance deductions

HMRC’s view is that both elements should be treated as normal employment income, fully subject to tax and NICs.

Crucially, HMRC is not alleging that Remedy operated an umbrella company or directly ran a payroll scheme. Remedy has been named as an “enabler”, with HMRC stating that it failed to carry out effective due diligence on the operation of the supply chain connected to Aura PAYE Limited. HMRC has also noted that the arrangements appear to have targeted healthcare workers, including NHS staff, heightening the seriousness of the case.

This distinction matters. Remedy has not been accused of inventing the scheme — but of facilitating access to it by allowing it to exist within its supply chain.

This Is Not Joint and Several Liability — And That Matters

Despite the timing and the commentary that has followed, this action is not an example of Joint and Several Liability (JSL) “kicking in”.

JSL has not yet started. The rules are due to apply from April 2026, and they are not retrospective. HMRC currently has no power under JSL to transfer unpaid PAYE or NICs from umbrella companies to agencies or end clients for past arrangements.

What HMRC has done here is use its existing naming powers under the Finance Act 2022 — a reputational tool designed to expose schemes and associated parties it believes are involved in tax avoidance. This is about public accountability, not the automatic transfer of tax debt.

That distinction is critical, because it highlights a wider truth: JSL does not prevent schemes from existing. It simply shifts where HMRC can attempt to recover unpaid tax once non-compliance has already occurred.

As argued previously, JSL was never designed to “fix” the umbrella market. It was designed to reallocate risk.

Is This Really the First Time an Agency Has Been Named?

In practical terms, yes.

HMRC has long published lists of named tax avoidance schemes and promoters, but these have overwhelmingly focused on umbrella companies, payroll providers, or opaque promoters operating several layers away from the recruitment brand. Naming a front-facing employment agency represents a clear escalation in visibility.

However, it would be a mistake to treat this as a structural turning point. Naming an agency does not introduce new legal consequences, nor does it prevent similar arrangements from emerging elsewhere. It simply shines a light on one part of a much larger and well-established pattern.

What Happens Now — And Who Is Really Affected?

Despite fears stirred by some commentary, most contractors are unlikely to suddenly receive large tax bills as a direct result of this announcement. Being named on HMRC’s list does not automatically trigger retrospective assessments for every worker who passed through the supply chain.

Where the real impact is felt is elsewhere.

Reputational Damage

For an agency, being publicly named by HMRC as an enabler of tax avoidance is deeply damaging. Clients, compliance teams, and workers will take note. Commercial relationships can quickly unravel, and the long-term viability of the business may be called into question.

Insolvency, Not Deterrence

History suggests that reputational damage often leads not to reform, but to liquidation or restructuring. And once that happens, HMRC may have little left to pursue.

Directors Can Move On

Perhaps most importantly, being named does not prevent directors from setting up new agencies or operating under different brands in the future. Unless formal director disqualification occurs, the same individuals can re-enter the market — often offering exactly what contractors still want: higher take-home pay.

This is the uncomfortable reality that regulation rarely addresses.

Why This Changes Less Than It Appears To

The Remedy case may look like a watershed moment, but it reinforces a familiar pattern:

• Contractors continue to prioritise take-home pay

• Schemes adapt faster than regulation

• Liability is shifted, not eliminated

• Naming and shaming damages companies, not incentives

JSL will not stop tax avoidance schemes from being created. It will not stop agencies from experimenting with riskier supply chains. And it will not stop directors from reappearing elsewhere once reputational damage becomes terminal.

What it may do is push more activity further into the shadows, increase supply-chain complexity, and make compliance more about optics than substance.

In that sense, this case doesn’t contradict the argument that JSL won’t fix the umbrella market — it strengthens it. HMRC is still playing a game of whack-a-mole, and Remedy is simply the latest name on the board.

The question isn’t whether HMRC is getting tougher. It’s whether the tools being used can ever truly change behaviour — or just reshape it.

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The JSL Legislation: Why It Won’t Fix the Umbrella Market — And May Even Make It Worse.