Payment scheme - scam ??

[lukemg]

Anyone else heard from these jokers - After the grief some people have got themselves into with these schemes, I am very unhappy at being approached - NOBBERS !

'My name is xxxx xxxxx and I am from Payment Scheme. I understand that you are presently contracting your services (or possibly in between contracts)and more thanlikely invoicing for your time and expertise. Our company can offer you a payment method through our partner,Bedouin Group, that willsignificantly increase your earnings, enabling you to take home up to85% of your monthlybilling. Over 1,200 contractors and Interim Managers are alreadybenefitting in this way. HMRC target those who avoid tax, and rightly so. If someone avoidstax, they should bemade to pay it back. Bedouin are NOT operating a tax avoidance scheme.'

[TinTrump]

I had a conversation with them a month ago after I was cold called. It sounded like some of the dubious schemes I've read about & a search on this forum has revealed previous threads where an apparent Bedouin rep. has failed to address a number of questions.

I'm staying well clear of them.

[Wanderer]

enabling you to take home up to 85% of your monthlybilling. Blah, blah, blah. NOT operating a tax avoidance scheme.'

How much of the 15% that you don't take home is given to HMRC in tax? What? Almost none?

If it's not "tax avoidance" then surely it must either be "tax evasion" or "tax deferral" but I'm sure they know what they are doing...

[LisaContractorUmbrella]

This is how it works apparantly

1.The Company settles varying amounts to the EBT from time to time.
2.The Employee may make an application to the Trustees for an interest free loan.
3.The Trustees consider the loan application, and usually they are granted.
4.The employee receives the Interest Free Loan in their nominated bank account.
5.The loan is recorded by the Trustees in the Account.
6.The Trustees consider the indebtedness of each person entitled to maintain such a loan every year.
7.The Trustees consider it not in the best interest of the borrower as a category of employee to have the loan repaid.
8.The Trustees maintain the minutes of the trust, and also record the outstanding loans.
9.All loans are maintained on the records of the trust.
10.After a period of six years the trustees consider again whether the loan should be recalled, and as previously determine that it is not necessary for the loan to be repaid, and that it would not be in the borrower’s interest to have it paid.
11.In common law, as far as the borrower (the employee) is concerned, an “uncollectible” loan falls away after 6 years, and thereafter there is no liability for Benefit in Kind Tax.

I'll leave it up to you to comment on the legality or otherwise

[lukemg]

Once enough numbnuts are trawled into the scheme, the charges start to edge up to a ridiculous level but you are trapped in the scam. Large numbers try to pull back out and all the contact numbers, email and website go 'dark'. You then start to get requests for tax payments and forms that you presumed were being done on your behalf. You go through the classic sequence of mourning over the next 9 months, realise you have been done for a mug and move on.
And for that reason - I'M OUT !!!!

[Ravello]

This is how it works apparantly

1.The Company settles varying amounts to the EBT from time to time.
2.The Employee may make an application to the Trustees for an interest free loan.
3.The Trustees consider the loan application, and usually they are granted.
4.The employee receives the Interest Free Loan in their nominated bank account.
5.The loan is recorded by the Trustees in the Account.
6.The Trustees consider the indebtedness of each person entitled to maintain such a loan every year.
7.The Trustees consider it not in the best interest of the borrower as a category of employee to have the loan repaid.
8.The Trustees maintain the minutes of the trust, and also record the outstanding loans.
9.All loans are maintained on the records of the trust.
10.After a period of six years the trustees consider again whether the loan should be recalled, and as previously determine that it is not necessary for the loan to be repaid, and that it would not be in the borrower’s interest to have it paid.
11.In common law, as far as the borrower (the employee) is concerned, an “uncollectible” loan falls away after 6 years, and thereafter there is no liability for Benefit in Kind Tax.

I'll leave it up to you to comment on the legality or otherwise

Which is the same model as Payscheme Plus use(d), apart from the fact that it just sounds dodgy, I'm far from convinced that I would want my incomings to be subject to "Agreement of loan by Trustees" no matter how arbitrary the process is alleged to be.

Equally you are relying on the scheme provider holding to their agreement not to call in the "loans". IANAL but I would imagine that if you were to get written assurance that the loan would not be recalled this would effectively write-off the loan and hence be taxable as a BIK. Otherwise you wait six years and hope they don't call the loan back in... No thanks!

[Old Greg]

I had a contractor colleague who was using a similar scheme. She was sure it was legal because the company she was using had told her it was. I suggested that if she was that confident, she could send a note to HMRC advising them of he arrangements. She spent a great deal of time living in fear...

[Noobie McNoob]

I've been with Bedouin for a wee while and on another thread dedicated to them one of their guys posted this

BUDGET 2009

Chancellor confirms that Umbrella Companies will continue to be kept under scrutiny.

No mention of any measures to be taken or under consideration against EBT’s. Great news for Bedouin customers, but not so good for those continuing to go down the less and less lucrative Umbrella route.

Those with a good memory will recall that at Budget 2008 it was initially announced that HMRC would begin monitoring Umbrella Companies, and since then many previously used expense-claim groups have been prohibited or restricted – leaving some of you with as little as 69% in your pockets – might as well be PAYE!
BUT you might have thought this was the route of lesser risk. Wrong!

At Budget 2009 just announced the Chancellor has stated that Umbrella Companies will continue to be kept under scrutiny. Small wonder, when all their efforts over the past two years have effectively sought to coral contractors like lambs to the slaughter into this working style. Not odd at all when it is considered that this is the route where change can be effected most easily by the simple amendment of UK legislation.

So, the line of least resistance and least risk, and the only remaining compliant, fully tax paid solution out there where you can rest easy with peace of mind is that provided by Bedouin.


Sign-up now at ...

What do the fine people on here make of this?

[LisaContractorUmbrella]

I've been with Bedouin for a wee while and on another thread dedicated to them one of their guys posted this



What do the fine people on here make of this?

It's out of date - EBT's were outlawed end of last year

[psychocandy]

I've been with Bedouin for a wee while and on another thread dedicated to them one of their guys posted this



What do the fine people on here make of this?

Well, Bedouin are hardly going to say we're risky and dodgy are they?