Kamal: Limited in response by privilege
A practising barrister has for the first time been added to HM Revenue & Customs’ (HMRC) list of tax avoidance promoters.
HMRC said its view was that Setu Kamal “designed four tax avoidance schemes and created contract templates that are essential to how these arrangements operate”.
These schemes promoted by MLG Pay Ltd, The Umbrella Agency Ltd, Veqta Ltd, and Vision HR Solutions Ltd “typically promise workers they can keep more of their pay by avoiding income tax and National Insurance contributions” (NICs).
The MLG scheme “artificially” splits the user’s total remuneration for their contracts with MLG into two elements: one with income tax and NICs deducted and the other without deduction of either as it is claimed to be for an option grant or benefits in kind.
HMRC’s view is that both elements of the payment should be treated as normal income/salary.
The others operate similarly, with the second element paid by the scheme company for an annuity. HMRC considers this to be disguised remuneration.
Its position was that these arrangements “do not work and that users of them face tax bills, interest and potential penalties”.
Mr Kamal, who was called 20 years ago, practised from Old Square Tax Chambers until last year2024, when he set up as a sole practitioner.
He told Legal Futures that as “any advice I gave to a client is legally privileged… I am unable to say more”.
Jonathan Smith, HMRC’s director of counter avoidance, said: “Legal professionals have a position of trust and responsibility – they shouldn’t be involved in creating schemes that purport to let people avoid paying tax that funds our vital public services.
“We want to support those who have used these schemes to exit them and bring their tax position up-to-date. I urge them to contact us as soon as possible so they can settle their affairs.”
HMRC said the move showed that it did not just target the companies and businesses that promoted and sold avoidance schemes, “but also those who are behind them – no matter their status”.
It said many of these arrangements operated through umbrella companies, with warning signs for workers including loans instead of wages, minimal tax deductions or complex payment structures.
From April 2026, new legislation will target umbrella companies by making recruitment agencies that use them legally responsible for accounting for PAYE on workers’ pay.
As of 4 September 2025, HMRC has published details [1] of more than 170 tax avoidance schemes and named more than 170 promoters.
Relatedly, well-known tax campaigner Dan Neidle, former UK head of tax at Clifford Chance, reported yesterday [2] that Mr Kamal had last month sought an injunction to restrain publication of allegedly defamatory statements he made in February and May this year over Mr Kamal’s work on another tax scheme, promoted by Arka Wealth.
Though it was meant to be on notice, Mr Neidle said he knew nothing about it until after it was dismissed by Mrs Justice Steyn – which he quoted Mr Kamal as saying was due to his misunderstanding what ‘on notice’ meant.
In her order, Steyn J said there was “no justification” for the application being made before the issue of proceedings.
“The procedure for seeking interim relief in respect of intended proceedings should only be used where the application is so exceptionally urgent that there is no time to issue the claim prior to making the application. This is manifestly not such a case.”
The judge noted that the application also failed to address the test for an injunction, namely that the publication had to be “unarguably defamatory” – which was a “very high threshold” – and contained a “lack of clarity” as to precisely what words Mr Kamal complained of or what meaning he contended they bore.
Steyn J said: “In my judgment, given the defects in the procedure pursued and the defects in the application which I have identified, the appropriate course is to dismiss the application without a hearing.”