EISS investments

Patton22

Hi, my last employer int reduced a saving scheme EISS (employer insurance saving scheme) for all employees to join. It was through a company called Corporate Solutions. They said it was a 5 year deal in which they use some of your tax to.invest then pay out after the 5 years. Now the 5 years is up, they say the can't pay out as they are been investigated by the HMRC and that we could be liable to pay the tax back. We were informed it was a reliable and all.above board scheme. Does anyone have any info about it. Thanks

Keep_pedalling

Sounds like this scheme

https://forums.moneysavingexpert.com/discussion/4122595

Looks like a tax avoidance scheme to me, so I think you can expect a demand for payment of back taxes at some point in the not too distant future. On top of the tax there will be interest added and possible fines as well.

AnotherJoe

make a small claims court claim against the employer for whatever you are out of pocket for, once the dust has settled.

Patton22

Hey. The company I worked for has gone bust. Around 600 people where involved in the scheme. The company behind the scheme is still offering the scheme. Thanks

Keep_pedalling

Patton22 wrote: »

Hey. The company I worked for has gone bust. Around 600 people where involved in the scheme. The company behind the scheme is still offering the scheme. Thanks

How are they still able to offer the scheme, and at the same time refuse to deliver what they promised, because they are under investigation?

It would help if you named this company.

Patton22

The company offering the scheme is called Corporate Solutions. My old company that has gone bust is called polestar. They said they can't pay out as they are under investigation.

Keep_pedalling

Patton22 wrote: »

The company offering the scheme is called Corporate Solutions. My old company that has gone bust is called polestar. They said they can't pay out as they are under investigation.

There seems to be several companies using that name, where are they based?

Patton22

Think they are based in London and Milton Keynes. I'm not bothered about receiving the money in just worried about the back tax that I might end up paying.

puk999

The printing firm? http://www.pwc.co.uk/services/business-recovery/administrations/polestar-group.html

bowlhead99

When you underpay tax due to a systemic issue with your employer, HMRC will (by concession) often make the employer pay it up and not the employee.

In this case it could be argued that the company due to their misunderstanding of tax law mistakenly failed to withhold the right amount of tax and NI from hundreds of employees while the employer's payroll and HR department continued to tell the employees that the correct amount of tax had been deducted and paid over to HMRC for what they had earned. So HMRC could perhaps decide to go after the company not the staff, and then finding the company insolvent, give it up as a bad job.

Alternatively, they could find that you had all participated in an unsanctioned tax avoidance scheme and that thinking you could sign up to pay over your gross income to some insurer does not get you out of paying income tax on your remuneration, does not mean you don't have a tax bill because ignorance of the laws of this country is not a defence to their charges.

As HMRC are investigating but have not concluded, it isn't possible for us to tell you that your particular implementation of the scheme was against the rules, or that they are definitely going to be chasing for tax, or whether they will want it from you personally or over how long.

It would be prudent to save up so that it makes it easier to pay if you need to.

Pincher

There was a government scheme called Performance Related Pay (PRP), about 18 years ago. I think the intention was for the company to pay a bonus, for exceptional performance. Every company with a payroll department went the other way, so you are invited to salary sacrifice 10%! They set the performance target so low, that you are bound to get the money back, TAX FREE! :beer:


http://www.contractoruk.com/news/0012777hmrc_targets_temporary_staff_tax_avoidance_schemes.html

"But in line with the department, tax barrister Jolyon Maugham QC told the investigation that the scheme would fail the “critical test” -- whether it has been created specifically to avoid tax."


Obviously, the payroll department set up the PRP scheme purely to save on tax, ignoring the original intent, and was obviously evading tax, and Inland Revenue (HMRC) could have just declared it evasion, but they just pulled the PRP scheme, and we kept the tax saved.

So, pray you have smart lawyers.