Umbrella company tax/loan sham

ajsdisc

I used to do work and used this simply paid umbrella company, wasn't entirely sure what the whole thing was but we got paperwork (if I can find it) that stated we do the work and guarantee your pay any mistakes is on us.

It is one of these you get paid via a loan set up but I never saw the benefits in all honesty as you lost close to 20% of your income anyway?

So basically I was paid by the company I was working for into this simply unmbrella lot and then they paid me by means of a load or something? All a bit messy.

Anyway I did 3 lots of work and opted to use a normal ltd company set up.

Yesterday I get an email stating I will be liable for tax unless I pay this other company (CPS OIM).

So I am now trying to fathom out what the hell is going on and how this other company has all my personal details? Why they are asking for money from me and why are they asking for it when I was told this would never happen?

Its not a huge amount of income, as after I realised this was actually a scam and I was a massive 2% better off, I stopped using them!

taylornj

Sounds like the Loan Charge. LCAG (Loan Charge Action Group) have a help desk service, forums to which you have guest access.



https://www.hmrcloancharge.info/


The deadline for disclosure is 30th Sept 2019. but you should have been notified by HMRC that you are impacted by the Loan Charge.


There is an on going review into the Loan Charge, due to end in Nov 2019, LCAG are presenting evidence to this review.



Up to April 2019, you could repay loans to avoid the loan charge, or agree a settlement with HMRC. After which you have to disclose the loans to HMRC, and include in the 2018/19 Self Assessment. There is no means of paying anyone to avoid this outcome. Any company suggesting otherwise is very likely a scam, now is way past doing anything.


The Loan Charge was in the March 2016 budget.


My own personal plan, is I simply offset the tax due with tax relief, bring my tax bill down to zero, that tax relief then provides additional tax relief and benefits which more than covers the Class 4 NI with sufficient benefits for myself that the Government lose out. This is a fail safe plan, as my Loans had been repaid in 2010/11, just HMRC are suggesting they haven't been.



While Loan Charge is justified the introduction by fairness, the fact is the tax system allows the claiming of more tax reliefs and benefits than the tax paid so long as you can afford it, tax avoidance via loans or share dividends is less of a problem than the basic unfairness built into the tax system, Loan charge is a one off unfair tax that doesn't solve any problems just grabs taxes.


The Loan charge goes back 20yr years, and by lumping all those earnings paid via loans into a single tax year, pushes most to the very highest tax bands, making it unaffordable, for any that are financially vulnerable, forcing them out of work, loss of homes, and bankruptcy. The very name "Contractor Loans" shows HMRC specifically targeting a vulnerable minority group.


LCAG is best place to go for information or specialists like WTT Consulting. The Umbrella Company and those associated with it are in it just for the profits, and could well be making your problems much worse.


Be very careful if you call HMRC, just the mention of the Loan Charge and they will attempt to take as much as possible in taxes, pay it all now and sort it out later, I've been waiting since 2013 for HMRC to sort it out later, they completely ignored the information supplied to them. They have specialists manning the help desks trained to make you feel guilty, shame, and guide you into making payment that aren't necessary even due, tricks that rival the best scam artists.

ajsdisc

taylornj wrote: »

Sounds like the Loan Charge. LCAG (Loan Charge Action Group) have a help desk service, forums to which you have guest access.



https://www.hmrcloancharge.info/


The deadline for disclosure is 30th Sept 2019. but you should have been notified by HMRC that you are impacted by the Loan Charge.


There is an on going review into the Loan Charge, due to end in Nov 2019, LCAG are presenting evidence to this review.



Up to April 2019, you could repay loans to avoid the loan charge, or agree a settlement with HMRC. After which you have to disclose the loans to HMRC, and include in the 2018/19 Self Assessment. There is no means of paying anyone to avoid this outcome. Any company suggesting otherwise is very likely a scam, now is way past doing anything.


The Loan Charge was in the March 2016 budget.


My own personal plan, is I simply offset the tax due with tax relief, bring my tax bill down to zero, that tax relief then provides additional tax relief and benefits which more than covers the Class 4 NI with sufficient benefits for myself that the Government lose out. This is a fail safe plan, as my Loans had been repaid in 2010/11, just HMRC are suggesting they haven't been.



While Loan Charge is justified the introduction by fairness, the fact is the tax system allows the claiming of more tax reliefs and benefits than the tax paid so long as you can afford it, tax avoidance via loans or share dividends is less of a problem than the basic unfairness built into the tax system, Loan charge is a one off unfair tax that doesn't solve any problems just grabs taxes.


The Loan charge goes back 20yr years, and by lumping all those earnings paid via loans into a single tax year, pushes most to the very highest tax bands, making it unaffordable, for any that are financially vulnerable, forcing them out of work, loss of homes, and bankruptcy. The very name "Contractor Loans" shows HMRC specifically targeting a vulnerable minority group.


LCAG is best place to go for information or specialists like WTT Consulting. The Umbrella Company and those associated with it are in it just for the profits, and could well be making your problems much worse.


Be very careful if you call HMRC, just the mention of the Loan Charge and they will attempt to take as much as possible in taxes, pay it all now and sort it out later, I've been waiting since 2013 for HMRC to sort it out later, they completely ignored the information supplied to them. They have specialists manning the help desks trained to make you feel guilty, shame, and guide you into making payment that aren't necessary even due, tricks that rival the best scam artists.

HI, not had any notification from HMRC? These incomes are from 2 years ago?

I am a bit wet behind the ears when it comes to fiscal dealings

I will head over to that website this evening

ajsdisc

Was told we wouldn't have got a letter from HMRC? Because:

These loans are not applicable for the 2019 Loan Charge. Hence why the offer is optional and pre empting any changes.



The company are not a scam.



Thanks.

taylornj

The only way Loans aren't applicable is if there is a Settlement agreed between the company and HMRC or Loans had been repaid. However HMRC has issued warnings in such cases.


You relying on a company that failed to pay the correct tax and NI in the first place to pay tax and NI in the Settlement for you, to repay the Loans you would need to have paid in cash and ensured you had records of the transaction taking place such as your bank statements.


LCAG members use telegram, which has a specific channel covering Settlement. Not one I follow myself, there are 100's of different types of schemes.


If your sure, the company has your back covered fine, but penalties just for non-disclosure to HMRC rack up to well over £3k+.


https://www.gov.uk/guidance/report-and-account-for-your-disguised-remuneration-loan-charge


If you do not report details of your outstanding disguised remuneration loan to HMRC before 1 October 2019, or the information is not complete and correct, you may be liable to:

• an initial penalty of £300
• further daily penalties of up to £60 a day for as long as the information remains outstanding, up to a maximum of 90 days
• a penalty not exceeding £3,000 for each inaccuracy deliberately or carelessly included within the information provided, or discovered after the information has been submitted and you do not tell HMRC

You don't need to report if in the process of Settlement or had repaid Loan prior to 5th April 2019. You can't be paying over to a company at this late date to start Settlement or repay any Loans, it had to happen on or before 5th April 2019.

taylornj

Here's a news item on Loan charge, LCAG and one of the MP's supporting change to the Loan charge.


https://youtu.be/C3NFhI84RBM

ajsdisc

They had come back with this statement when I mentioned some of the stuff you have said:

These loans are not applicable for the 2019 Loan Charge. Hence why the offer is optional and pre empting any changes.