Split pay? Check the tax

If more money reaches your bank than the net pay shown on your payslip, part of your earnings may have been kept outside the payroll tax calculation. On 22 October 2026, HMRC added two organisations to its published list: Pace Pay Limited and Workplace Workforce Solutions Limited.

HMRC names them as persons suspected of promoting tax avoidance arrangements. That is the precise legal status of the publication and is not a court judgment. The absence of another intermediary from the list does not mean its arrangement is approved. HMRC says it never approves umbrella companies or avoidance schemes.

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How does split pay work?

An umbrella company employs a temporary worker or contractor, receives money from an agency or end client and pays the worker. Most umbrella companies follow the rules. The warning signs appear when earnings are divided into:

• a small ordinary salary, often around the statutory minimum, with Income Tax and National Insurance deducted;
• a second amount paid without deductions and described as a loan, advance, bonus, profit share, capital payment or another supposedly non-taxable payment.

According to HMRC's published description, Pace Pay calls the second element an “umbrella advance” in the form of a discretionary profit-sharing bonus. Workplace Workforce Solutions pays a second element without tax or National Insurance deductions. HMRC's view is that both elements are normal employment earnings and should be taxed.

HMRC says Workplace Workforce Solutions appears to target healthcare and local-authority workers. The Pace Pay entry covers a Maltese company and a UK company with the same name; the published scheme reference is 21250281.

What does the warning look like in numbers?

HMRC's guidance provides a weekly illustration. With a £25 assignment rate and 37 hours, the compliant example shows gross pay of £783.09, deductions of £178.06 and net pay of £605.03.

In the avoidance example, the payslip shows only £506.30 gross and £416.91 net. Another £204.29 reaches the bank but is absent from the payslip and payroll calculation. A mismatch between the bank payment and the document is the clearest warning sign.

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What could the worker owe?

If HMRC finds that an avoidance arrangement was used, the worker may be asked to pay the missing Income Tax and National Insurance, interest and any related penalty. That comes on top of fees already paid to the scheme promoter. A lower official salary can also reduce pension contributions and future retirement income.

What should you check today?

1. Match every bank payment against the net amount on the payslip.
2. Look for separate transfers, messages about a second amount, and terms such as loan, advance, bonus, profit share or credit.
3. Check the employment contract, the agency's key information document and the full reconciliation from the assignment rate to gross pay.
4. Compare tax and National Insurance deductions with your personal tax account, pension account and student-loan record where relevant.
5. Keep payslips, statements, contracts and messages. The free official risk checker does not ask for your name or address.

If you have already received payments like these, HMRC advises obtaining independent tax advice and contacting CAGetHelpOutOfTaxAvoidance@hmrc.gov.uk. Keep the records and do not send money back without a clear explanation of what the payment was.

What should a business do?

HMRC tells agencies and end clients to check the entire labour supply chain, obtain sample payslips from the umbrella company and worker, and make sure the figures match. If an umbrella company appears on the official list, the guidance says to stop activity with it and warn its workers.

Since 6 April 2026, the agency, or the end client where no agency is present, is responsible for ensuring payroll tax is operated correctly in labour chains containing umbrella companies. If the umbrella does not pay the correct amount, HMRC can recover it from the agency or end client.

Coverage: the tax rules and published list apply across the United Kingdom.

Sources: the official list updated on 22 October 2026, payslip-checking guidance, business due-diligence guidance and PAYE responsibility rules from 6 April 2026. Checked on 23 October 2026.