HMRC enquiry into loan

[northernladuk]

Can some one recommend an umbrella company with a good reputation?

If you are after just a standard, all above board umbrella you can't go wrong speaking to Contractor Umbrella. Lucy, the MD posts on here regularly and they've done a lot of work helping contractors and Umbrellas with upcoming legislation and the like.

PAYE Umbrella Companies for UK Contractors | Contractor Umbrella Company

Rather sadly, I used the search term Contractor Umbrella in google and all 4 paid adverts offered 90% take home. One of them was even 92%! Very poor state of affairs.

[ASB]

D15,

This will sound harsh. I used to think "how could anybody be so stupid".

Over the years this has been going and the descriptions of why and how people signed up my view has changed. Perhaps a little foolish by not doing Independent due diligence and accepting what seemed like reasonable assurances. Trust of those felt to know what they were doing, perhaps tinged with an unsceptical attitude.

anyway to answer your question "is a loan scheme illegal". No it isnt.

But that is not important.

The question is simply how that money is treated. Scheme promoters would suggest it is simply a genuine commercial loan. Not income in any way and not taxable. They may be right.

hmrc would basically argue that it was income as soon as it was paid into the trust and taxable. The fact that the trust chose to lend it to you is irrelevant. They may be right.

So it is not about legality. It is about the taxation treatment of the money flow.

it also seems you are unsure of your current arrangements. I would suggest that means run for the hills. If it is not straight paye income on your billings then I would very seriously consider whether that is an arrangement I was happy with. I may well be happy with a high retention rate. But would be deeply unhappy with the underlying storem brewing which will almost certainly arrive with a vengeance.

[DonkeyRhubarb]

I bet very few people entered into these schemes off their own bat. I imagine they invariably heard about it from other contractor(s) who "sold" the idea to them.

Montpelier never actively sold their scheme; they relied totally on word of mouth. They didn't have a website or anything.

[ASB]

I was looking at jsops. Joint Stock Ownership. Another form of ebt. It looks somewhat risky and highly artificial to me.