Talent Resource Management

[u9k82]

I agree!!

Sounds like you have only been paying the interest on the loan, the principal still exists. They should have set this up a commercial loan (hence the interest payments) to ensure it passes HMRC inspection. I'd be more worried if they didn't.
I think JonC is taking the best course of action...let the dust settle and look at the options. Rushing into HMRC arms saying that this isn't a loan could be extremely risky...in my opinion.

I second that notion! I do feel that this is an attempt by batchworth to pass HMRC inspection and its in our best interest that they do .

We do need to let the dust settle and end all speculation I think we are whipping ourselves into a frenzy

Over the past five years batchworth must of had 20 ,000 + contractors passing through there books , all of which are in the firing line!

My advice woud be to:

1) leave Batchworth / TRM ASAP
2) Dont sign the agreement yet
3) Join Jon C's band of merry men
4) Once as a collective we have all the information from Redding / TRM then we can make a decision on best course of action

As a collective we can afford the best tax specialist / legal advice if needed . Hopefully it wont come to that , but if we follow points one to four above at least were prepared if it does!

I like most was mis-sold this product I believed that the scheme was HMRC compliant and that this was just a clever way of reducing your tax bill - who wouldn't!!

If it did come down to legal action as a collective we have so many e-mails and letters thats can be used as angles . I have a e-mail stating that the loans will never have to be repaid and assuring me I'm HMRC compliant


JON -C I'm not sure how i join your group but i want too .

[SteveO]

Doh!

The loans are legal. If you know nothing about the agreements and have signed one then see an accountant! If you have not signed an agreement but have questions then see an accountant. The people on this thread are really only making intelligent guesses.

Will the loans be recalled? 99.9% chance of No. If they are get a lawyer and quash it. If you’re not willing to take this risk then go permy.

Do I pay tax? If you pay 1% of interest on the loan then you need to declare a Benefit in Kind on your P11d. If you pay 6.25% then you don’t.

What happens if I ask for the loan to be forgiven? If you still work for the company at the time its forgiven then you pay lots of tax. If you DO NOT work for the company at the time then you DO NOT pay tax.

[catch22]

I’m yet another in the same boat - I came back from holiday to find the letter from Redding on my doorstep. Like most, I’ve got no plans to sign anything until I fully understand the implications.

JonC, I’d appreciate your efforts and would like to join your mailing list. (If the moderators can help out in that regard it would be most appreciated.)

Thanks.

[u9k82]

Also

I was just wondering... does anyone know of anyone who has been investigated while on these schemes ?? - I mean an individual contractor ?!

Also say for example for a loan amount of 40k have thats a year old , how much back tax would you be charged ?

could someone come up with a simple calcuation so that people can get a rough estimate (minus fines) of how much they could own the tax man (26% of loan amount)

that way people can compare the monies owing potentially owing HMRC v Balance of loan , which is the lesser of the two evils

And wouldn't the situation get worse each year with interest ?! osterich syndrome could be very costly!

I.e 10,000 in tax this year , 13,000 the next ......... what the figure be at year 10 if asked to repay the loan ?! - The HRMC route will be alot more punishing with 10 years of interest and fines

Not trying so stir up immediate action (please see my post supporting JON c's call for calm)

I really want to help especially the guys who have done 3 years + service with ridiculous loans, it could of easily been me!

[eyetie]

Questions

Has anyone actually left TRM since the Redding letter came out and asked TRM to forgive their loans?

Can someone knowledgable explain the difference between forgiving and writing off a loan in terms of the liability to contractors?

Should we start a fighting fund (e.g. through justgiving.com) so that we can approach a tax lawyer and get some definitive professional advice? I know a tax lawyer but I haven't mentioned anything about this to her yet.

[NotAllThere]

I have been with TRM just over a year and was shocked to receive the letter from Redding. I was under the impression that the loan was paid each week/month from the funds received from the agency and we paid interest on the amount loaned that week/month. So surely we don't owe anything?? If we had to pay them back then they would be getting back the money from the agency again and we would end up being payed the basic minimum wage.
Confused does not adequately describe how I am feeling at the moment!!

If you work for a consultancy, like accenture, it works like this. They have a contract with the client. The client pays them £000s per day, and accenture pay you thrupence ha'penny. The money you earned for accenture doesn't belong to you.

With TRM it's similar. The agency pays TRM. TRM pay you the minimum wage out of what the agency pays. TRM take the rest of the money you earned and place into a trust, extracting first a little to cover their management fees/interest on any loans. So the trust own the cash you earned. Not you. They then grant you a loan.

What you seem not to understand is that the money that you've earned has gone to TRM and then into the trust. That money is owned by them. It's their cash, not yours. The money you earned for TRM belongs to them, not to you. The agency have a contract with TRM; they're only obliged to pay TRM's invoices. They've no obiligation to give you a penny.

When the TRM trust lends you money, you owe a legal debt to the TRM trust. They've loaned you their money. They own your debt.

I do wonder that, if the trust have sold the debt to Redding, whether the trust have acted in the beneficiary's interest. It would appear not.

[Lewis]

I do wonder that, if the trust have sold the debt to Redding, whether the trust have acted in the beneficiary's interest. It would appear not.

Nobody has confirmed yet if TRM used a trust.

[NotAllThere]

Fair point. In which case TRM don't have to act in the recipients best interest. So why on earth would someone give them their hard earned cash?

[facefacts]

To TRM or not to TRM

So we all want to maximise our return from our contract rate and have engaged TRM to do this for us. In some ways we have been forced into doing this. Myself having been a contractor for 12+ years now endured the suffering of limited company status and the headache of IR35. But along came TRM offering what seems a very simple service - they get the money pay you a salary and using their tax consultants maximise the return and charge a % fee.

Can I just say that what they do behind the scenes changes all the time; pre 2004 they used EBT's until the government closed the loophole. Those with TRM at this time would have reaped the benefit of this tax initiative. They then moved on to loans on a projected dividend, we became shareholders within the umbrella company and then as I have found out moved to direct loans to an employee. Like a lot of you guys this is what I have been told via communication channels within the organisation

However because of the current investigation a specialist chartered tax advisors company has been hired to act as the intermediary between TRM and HMRC. This is where I feel the migration to Redding Finance has been initiated. So we get some paper work through with loan figures on them and yes it comes as a shock. What do we do - I'd make sure that these figures add up to the draw downs that you have received; if not query this with TRM. Seeking legal advice can also be another option but be careful there will be numerous points of view on this and isn't this forum full of them? - whether any of them have any standing will only be proven in a court of law and like TRM I'm sure that's what we are all trying to avoid. For those of you losing sleep over this and feel that TRM are a bunch of cowboys you've obviously lost the trust relationship with this company that these initiatives are founded on.

[zohan]

To be safe from TRM and HMRC and after considering all the discussions that we had since last week, I can see 2 possible options.

1. Request TRM or Redding to change their repayment terms from the current 10 yrs to 100 yrs or more. This option is safe from HMRC point of view as this loan will exist for life and then will be written-off or forgiven when the concerned party dies (Or) TRM can clear of the Loan by paying us dividends over the years to come.

2. Stop all dealings with TRM / Redding and request TRM to forgive our loan. Once forgiven, the outstanding loan amount automatically becomes earnings. Then declare the outstanding loan to HMRC and pay tax for it and close this issue forever.

Any suggestions???