Loan Recall Case Study: Amanda

[Protagoras]

Great to see the work that the CUK team is putting in to expose the goings on with these so-called loans.

[eek]

I got as far as

On 18 July 2016, Adam Parker of IQ Contractors emailed Amanda, telling her that Umbrella Requirements would contact her before speaking to her agency. He added an intriguing instruction: “Please remember to only mention Umbrella Requirements to your agency.”

At which point I stopped because anyone continuing beyond that is willingly lying to the agency, end client and HMRC..

Now if the agency is in on the game (and from 2016 many were) I have sympathy but knowingly joining a scheme in 2016 - I'm sorry but that's self inflicted...

[Protagoras]

Now if the agency is in on the game (and from 2016 many were) I have sympathy but knowingly joining a scheme in 2016 - I'm sorry but that's self inflicted...

The category of worker who didn't fully understand, found the arrangements a bid odd, but didn't know enough to avoid getting involved does seem to be real thing. Or maybe I'm just being generous ...

I do have a problem with the 'loan charge' - government should have legislated to render invalid as loans sums deemed as income for tax purposes. Designating a disguised remuneration 'loan' as 'loan for income tax purposes' is not a concept that should have been allowed to exist.

Lots of people I know find dealing with tax daunting and don't really understand. A common one I find is higher-rate tax payers who are employees and don't appreciate that they need to declare interest income, under the assumption that it's taxed at source or the belief that it should be.

[eek]

The category of worker who didn't fully understand, found the arrangements a bid odd, but didn't know enough to avoid getting involved does seem to be real thing. Or maybe I'm just being generous ...

I do have a problem with the 'loan charge' - government should have legislated to render invalid as loans sums deemed as income for tax purposes. Designating a disguised remuneration 'loan' as 'loan for income tax purposes' is not a concept that should have been allowed to exist.

Lots of people I know find dealing with tax daunting and don't really understand. A common one I find is higher-rate tax payers who are employees and don't appreciate that they need to declare interest income, under the assumption that it's taxed at source or the belief that it should be.

As I've explained a lot of times the story of the money is a number of stages

1) Worker does work
2) Agency pays employer for work
3) worker receives money

or
3a) employer puts money in trust as worker has agreed
3b) trust lends worker the money

HMRC and the tax looks at the overall picture, the trust is looking at a tiny part of it (parts 3a and 3b) at which point the money has been given to the trust and the trust lends it to the worker.

And I'm sorry but there is a difference between not understanding the nuances of interest and being perfectly fine with being explicitly told to lie about how your employer is paying you...