Garraway Consultants - Too good to be true?

[BrilloPad]

This is the details in the pdf brochure they sent me:
<SNIP>

Looks like a loan scheme. HMRC have their eye on them. Some in s58 thread are still getting issues 10 years after their tax returns and still ongoing. Why go through all that aggro for an extra few percent?

[DaveB]

This is the details in the pdf brochure they sent me:

When you join Garraway Contracts you become
an employee of Garraway Contracts. Garraway
Contracts invoice your client for the services
you provided at your agreed rate. Garraway
Contracts pay you a salary equivalent to the
national minimum wage which is then subject to
PAYE.
As an employee of Garraway Contracts, we will
deduct all necessary tax and national insurance
liability from this salary prior to paying you.
The remainder of the contract value becomes
the profits of the company.
To process the rest of your income, Garraway
Contracts agree to a rolling credit facility with
you. This rolling credit facility is employment
related for tax purposes. As you pay interest on
the rolling credit facility at official rate, it is tax
free. The rolling credit facility will be enough so
that, after the payment of tax on your salary
and interest on rolling credit facility, your net
income plus the rolling credit facility amount,
add up to an agreed percentage (typically 90%)
of the contract value.
The employed status of the solution will mean
that you should not have to complete a tax
return for the income earned through Garraway
Contracts. It’s worth noting however, that you
may need to if you have other sources of
income.

Among other things they are effectively asking you to work for minimum wages and trust them to loan you money to make up the rest of your income. If any thing goes wrong you will have no rights to demand the balance of money from them as it is a loan and not a salary so there is no legal obligation for them to pay it to you, nor can you show damages since you have not lost anything, you can always go elsewhere for a loan if you need money. And for this they want around 10% of your day rate in fees.

For the sake of what is probably a few hundred pounds a year is it really worth signing up for a scheme like this when you can legitimately work through your own limited and not worry what happens when HMRC decide they don't like the scheme and shut it down.

[doomage]

Did you sort your visa issue - are you expecting these guys to sponsor you as employers?

[d000hg]

Has anyone heard of or dealt with Garraway Consultants? Basically they're offering to get me about 85% of my contract rate, and that just sounds a little too good to be true, so I'm being cautious.

Ask yourself if you'd be happy with this going on if you were in charge. If the answer is no, be VERY wary.

[cojak]

Go ahead if you think it's worth the risk, no-one here is going to tell you what you obviously want to hear.

But be warned if you come back here crying that bad boys took your money and won't give it back or HMRC came knocking and wanted it instead I will move your post to General and encourage everyone to point and laugh at you.

HTH.

[centurian]

But be warned if you come back here crying that bad boys took your money and won't give it back and/or HMRC came knocking and wanted it instead I will move your post to General and encourage everyone to point and laugh at you.

HMRC probably wouldn't care if the bad boys took your money - they may still come after you anyway on the basis that you earned it - and then lost it.

[DaveB]

HMRC don't care if the bad boys took your money - they will still come after you anyway on the basis that you earned it - and then lost it.

ftfy

[SupremeSpod]

Go ahead if you think it's worth the risk, no-one here is going to tell you what you obviously want to hear.

But be warned if you come back here crying that bad boys took your money and won't give it back or HMRC came knocking and wanted it instead I will move your post to General and encourage everyone to point and laugh at you.

HTH.

Looks like he's trying to advertise the scheme imo.

[BlasterBates]

HMRC will automatically open an enquiry after you have handed in your tax return. You will almost certainly have to deal with one of these:

HMRC Specialist Investigations &ndash; Code of Practice 8 and other non-fraud investigations

It will probably take several years before it´s resolved and you may have to go to a tax tribunal. Are you sure you will have/can afford legal fees to deal with this?

I notice the solution does seem to mention that you might not need to declare it. That looks like you might face one of these:

Contractual Disclosure Facility. Code of Practice 9, Tax Fraud

[cojak]

Looks like he's trying to advertise the scheme imo.

Yes it does, but I let these things through to allow us to laugh at them and log the fact for some other soul to read while google-ing them.