I want to leave a Umbrella Loan Scheme to go LTD

[janehatton]

hi,

after 20 yrs of being perm i have started contracting - now been 10 months i am using a accountant who put me on some type of loan scheme where i have a basic salary and receive a larger monthly sum (sold as) intellectual property rights which are then written off. i think the co. is uk based but prob has ties into isle of man\jersey. they all seem to.

i was new to the contracting game hence being guided down this route and assured is legit.

now im becoming more familiar with things and have done alot of reading - i do not feel comfortable with this and feel the provider has put me in a procarious position. i may be wrong, but it seems unfair if they have - as i seeked professional advice from them.

i want to now start a ltd co and move away from this provider and have the below questions and queries...

am i better of waiting til the new tax year before going ltd? and make sure the scheme provider does my SA in may ASAP while they are still around - and let them justify there schemes as sold to me to hmrc.

if i move now to ltd and a new accountant, i guess the current umbrella provider wont be doing my sa next year for the 10 months i was with them - and the new accountant wont have a clue how to deal with the earnings i have taken so far? also my years taking will be very low as i have paid fees then looking at a high amount of tax. i am happy paying tax of course which is why im writing this - but dnt want to make a stupid move and cause unesseccary loss. what do i do here?

if this is not hmrc compliant, then shouldnt i inform hmrc, as i am technially being scammed and stitched up?

what is the best way to move away from the scheme, go ltd and be tax efficient asa possible.

is it worth me calling pcg?

can anyone recommend a accountant?

as this is my first year, will hmrc contact me to complete a SA - how will they know to as technically i am employed by this umbrella.

when i leave the umbrealla, what do i need from them, p45, p11d, p60 etc?

perhaps i am being paranoid and should give them a chance?

i just want to do things right....

THANKS A MILLION

jh

[Scruff]

Welcome

You are going to need to first join the PCG - you aren't going to get any advice from them unless you are a paid up member, and to be frank, even then they aren't going to advise you.

I would suggest, that as a start, you find an accountant (many of whom hang around this board), pay them for their Professional advice and take heed of it.

There is no point worrying about who/when your Self-Assessment is done, since the cost of having one done for you, is relatively trivial.

Please let us know the name/details of the scam that you are operating under, and the name of your so-called accountant, who has advised you, so that we can steer clear...

You are going to need some strong pills for the headache that I see forthcoming.

Happy New Year

Ya sockie

[malvolio]

Welcome

You are going to need to first join the PCG - you aren't going to get any advice from them unless you are a paid up member, and to be frank, even then they aren't going to advise you.

Yes they are, but not unreasonably they can't advise you on your specific situation: it's a helpline, not a dedicated corporate solicitor and accountancy practice. However they aren't going to be strong on loan schemes since only about 3% of the members use them. They can talk to you about running a UK Ltd Co though.

I would suggest, that as a start, you find an accountant (many of whom hang around this board), pay them for their Professional advice and take heed of it.

There is no point worrying about who/when your Self-Assessment is done, since the cost of having one done for you, is relatively trivial.

Please let us know the name/details of the scam that you are operating under, and the name of your so-called accountant, who has advised you, so that we can steer clear...

You are going to need some strong pills for the headache that I see forthcoming.

Happy New Year

Ya sockie

[Clare@InTouch]

I'd suggest that you swap over as soon as possible in order to avoid making your position worse - you'd have a better case for mitigating penalties with HMRC if you can show you moved away as soon as you realised vs. waited until it was tax efficient. Talk to an accountant, get a company set up, and discuss the exact nature of the scheme so they can advise on tax return completion for the periods in question.

Before you give notice to the scheme provider, email them to ask them how to complete your tax return. Get full details then, assuming there's no NDA issues, pass those details to your new accountant too. They should then be able to complete your return.

If you've been in the scheme 10 months then presumably they are doing your 2012/13 tax return anyway, which is due at the end of next month?

[janehatton]

Thanks for the replies...it was only in this tax year I started I now see.

It's not the cost of the sa, I just worried if I leave half way through the year a new accountant wldnt be able to clear this up with out me paying a big amount which the provider accountant can actually justify.

[janehatton]

Thanks!

It's actually only been from this year I joined I now see...

I guess I can say I thought this accountants advice was professional as she is still Confident with the scheme.

If I open a ltd with a new accountant... I'm confused how the two Wld do my sa for this year. With me keeping the benefits of the scheme ... If legit.

[malvolio]

Thanks!

It's actually only been from this year I joined I now see...

I guess I can say I thought this accountants advice was professional as she is still Confident with the scheme.

If I open a ltd with a new accountant... I'm confused how the two Wld do my sa for this year. With me keeping the benefits of the scheme ... If legit.

I'd suggest the original one would be the better bet, since they (presumably) understand how the scheme works. However, you should get a disclaimer from them that any penalties or other taxes due will be met by them.


Good luck with that...


However, the other way is to assume all your income to date is UK-based and UK-taxable (which it is, to be honest) , so treating the scheme income as salary and using dividends from your new company for the rest of the year may be the safer option and will keep HMRC off your back. Speak to an accountant that doesn't sell "clever" schemes and does understand contracting and go with what they tell you.

[BlasterBates]

My advice cash it in and tax it correctly.

I doubt that anyone will get away with any scheme now.

Getting on the wrong side of HMRC is a really bad experience. You don't want to go there.

...and they will come after you even if it is just a year, so don't think in terms of might, it definitely will end up as a COP8 investigation.

[BlasterBates]

My advice cash it in and tax it correctly.

I doubt that anyone will get away with any scheme now.

Getting on the wrong side of HMRC is a really bad experience. You don't want to go there.

...and they will come after you even if it is just a year, so don't think in terms of might, it definitely will end up as a COP8 investigation and you will definitely receive a nasty brown letter with a huge bill.

Sort it out now while you're still in the driving seat. You,ve lost the fee but you should be able to sort it out.

Do you really want to end up with a 5 or even 10 year ongoing dispute with HMRC?

[janehatton]

Thanks, by sorting out ..shall I just setup a ltd right away..and let the scheme provider do my sa next year and make sure they deal with the incomes accordingly

How ever it is they see legal ... Then it's up to hmrc to approve or not... And the provider to help battle

Or u saying just pay 40 percent on the loans via a new accountant or put in pension??