Overdrawn Capital Account Scheme (Aston Mae / Glen Mae / Procorre)

[GregRickshaw]

When I agreed to engage with WTT, I paid a flat fee (fairly significant) to cover settlement with HMRC and the associated appeals.

They offered another service, I believe it is called the "big group" or something, where you pay the fee, plus a monthly payment, which is working towards fighting HMRC. I just want to settle what I believe is reasonable and fair. I am hoping now things have started to move again, WTT can present my case and what I believe the settlement should be, but who knows.

There are many with an opinion on "Big Group" I have no comment.

I would cut ties with WTT find another company, get your settlement, your TTP and move on.

I seriously doubt WTT or anyone can ever win any of these cases.

Good luck with it all

[mightyspur]

I'd be surprised if that included taking an appeal to tribunal which can run to many (if not tens of) thousands.

Yes, I am sure you are correct, but that's why I want to settle. I'm not arguing against the premise, just the amount they think I should be taxed on. Hopefully I can make them understand and see it as I do, but hey it's just something else to worry about

[woody1]

When I agreed to engage with WTT, I paid a flat fee (fairly significant) to cover settlement with HMRC and the associated appeals.

I'd be surprised if that included taking an appeal to tribunal which can run to many (if not tens of) thousands.

[mightyspur]

Given this may run and run (and has already run) you need to get your own ideal scenario underway which is a settlement from what you say in your posts.

A good tax advisor will be able to get the figure HMRC say you owe, then get your tax advisor to call them and work out the TTP, a good advisor can do this very quickly and easily. Then you get your life back at least.

I don't know WTT enough to comment but I don't think any of the tax advisors has had even a sniff of winning one 'these' cases, they (the tax advisors) just seem to keep asking for appeals and more information whilst charging a lot of money (which is fine they have a job to do), but given the history of DR's/Schemes etc., are you just throwing more good money after bad.

I settled (not this scheme) a long time ago, got a long TTP thanks to my advisors and my MP and got on with life. Found I could pay it off in half the time but important thing was I got my life back.... ulp

And then MSC came... ha ha ha...

When I agreed to engage with WTT, I paid a flat fee (fairly significant) to cover settlement with HMRC and the associated appeals.

They offered another service, I believe it is called the "big group" or something, where you pay the fee, plus a monthly payment, which is working towards fighting HMRC. I just want to settle what I believe is reasonable and fair. I am hoping now things have started to move again, WTT can present my case and what I believe the settlement should be, but who knows.

[GregRickshaw]

Given this may run and run (and has already run) you need to get your own ideal scenario underway which is a settlement from what you say in your posts.

A good tax advisor will be able to get the figure HMRC say you owe, then get your tax advisor to call them and work out the TTP, a good advisor can do this very quickly and easily. Then you get your life back at least.

I don't know WTT enough to comment but I don't think any of the tax advisors has had even a sniff of winning one 'these' cases, they (the tax advisors) just seem to keep asking for appeals and more information whilst charging a lot of money (which is fine they have a job to do), but given the history of DR's/Schemes etc., are you just throwing more good money after bad.

I settled (not this scheme) a long time ago, got a long TTP thanks to my advisors and my MP and got on with life. Found I could pay it off in half the time but important thing was I got my life back.... ulp

And then MSC came... ha ha ha...

[woody1]

A few points:

1) the review is almost certainly a rubber stamping exercise, although it's definitely worth making representations as to why you dispute the amount
2) if you use a professional advisor (WTT or whoever) at the first-tier tax tribunal (FTTT), that could cost you big time. (NB. you can't claim costs off HMRC at a tribunal if you win; anything you spend on advisors is a sunk cost)
3) even if the FTTT finds in your favour, HMRC may well appeal to the upper tribunal and beyond (if nothing else than to be bloody minded and rack up even more costs for you)
4) going to the FTTT takes ages; you could have to wait 18 months, or longer, for a hearing and then another 6-12 months to get a decision ie. over 2 years!

Good luck!

[mightyspur]

Are there any ongoing appeals or completed appeals at independent tribunal stage?

You could possibly use some lessons from those or maybe find out who the tax advisors/lawyers are and seek those out.

I seriously doubt there is anything impartial about an 'impartial' officer.

Best case scenario the officer just wants to make sure the officer on your case has done everything correctly, rather than it being of help to your cause.

Again do you know of anyone else who has been through anything similar.

I heard Procorre quoted recently during a loan charge discussion, so it's clearly well known.

In reality you are probably staring into a long TTP agreement at best.

Good luck with the next steps

I'm not sure regarding ongoing appeals or completed appeals at independent tribunal. How would I find out that information? A cursory Google search offered no clues.

Yes, that is my suspicion as well regarding the review, still I can apparently provide more information to this officer as to why I disagree with the decision, although it's muddied slightly because I don't entirely disagree, or at least don't want to argue against their interpretation of the use of this overdrawn capital account, prior to the acquisition. I just want to settle on the actual amount that was in that account, which Procorre helpfully said to me "The position on the payments received in 2017 has been reconciled by ourselves and as such does not need to be declared against your self-assessment", rather than the total amount my company was valued at.

I never received the value my company was acquired for, so I'm being asked to pay tax on income I never received and I have already paid the appropriate CGT due on such a process.

I have WTT advising and handling my case, so hopefully they will be able to help and get my point across, or we'll be going to tribunal I guess.

[GregRickshaw]

Are there any ongoing appeals or completed appeals at independent tribunal stage?

You could possibly use some lessons from those or maybe find out who the tax advisors/lawyers are and seek those out.

I seriously doubt there is anything impartial about an 'impartial' officer.

Best case scenario the officer just wants to make sure the officer on your case has done everything correctly, rather than it being of help to your cause.

Again do you know of anyone else who has been through anything similar.

I heard Procorre quoted recently during a loan charge discussion, so it's clearly well known.

In reality you are probably staring into a long TTP agreement at best.

Good luck with the next steps

[mightyspur]

Well, almost 11 months since HMRC decision and my appeal, I finally received another letter from them today regarding my case with the "offer of a review". The letter gives 30 days to respond, where I can either request a review, or take my appeal to independent tribunal. If I don't respond, then the matter is settled and that's it, I owe what they say I owe and have to pay up.

Funny how they can take almost a year to get back to me, but if I don't reply in 30 days then that's it.

The review is supposedly by an "impartial officer" who works for HMRC, but I have very strong doubts they will come to anything other than the same decision.

My main concern is, despite what Procorre Legal have repeatedly stated to me, I don't want to argue with HMRC over whether tax should be paid on the amounts I had outstanding in the overdrawn capital account. I am more than happy to settle the tax on that. My issue is, they are stating the amount I owe tax on is the total amount my company was acquired for, as it was purely done to extinguish the balance on these loans. The big problem with that is the balance in my OCA was around 5% of what my company was acquired for, yet HMRC do not seem to acknowledge that at all

I have requested to go ahead with the review and apparently find out their answer within 45 days.

[mightyspur]

Hi,

Were you originally with Glen May and then moved over to Procorre in March 2017? That is what happened with me but I did not put a single invoice through Procorre, since it was a situation that happened without consultation, and immediately initiated the closure of my company, which was completed in November 2017.

In late 2016, I sent over 120 pages of statements and other information to HMRC as part of their investigation, and have heard nothing since.

Given that my old company has been closed for over six years, I don’t believe it can be reopened in order to pursue the employer’s NI and the change in legislation to allow that liability to be transferred to former employees, following the Rangers case, only became statute in late 2017.

A friend of mine kept his company open and has just received a large bill, addressed to his company, for the NI HMRC has calculated as owing and the amount includes interest back dated to 2019.

No. I joined up with Procorre in 2017 and received circa £14k payments via the overdrawn capital account that year (over a period of around 9 months), before I went through the acquisition process. I hadn't paid any tax on those payments because Procorre said I only had to declare it on my returns when they announced their profit allocation. As part of the acquisition process I asked what it meant to these payments and they said "it had been reconciled by ourselves, and as such you do not need to declare them against your self-assessment", so I didn't put them on either my 2016-17 or 2017-18 self-assessments, which my accountant at the time didn't seem to think was a problem.

I've made it clear to WTT as part of my appeal, that I am more than happy to pay the appropriate tax due on that 14k (plus any interest/penalties), as I can fully understand now why they are classified as a credit facility (despite the advice and assurances from Procorre to the contrary). Problem is, HMRC have taken the full amount my company was valued at with the acquisition and are claiming that is the total amount I had in the overdrawn capital account and classified it as income and thus calculated my tax on that amount.

As far as I can gather, there are a lot of people where that is the case, i.e. the total valuation of their company is the amount they had in the overdrawn capital account, so I am guessing HMRC have made a simple assumption for my case as well.

Sorry, I can't comment on your situation as my company is also still open. I tried to get it closed after IR35 changes were brought in, as I moved away from contracting through my Ltd company and the Procorre LLP, but then I received the letter from HMRC so it's still open.

It's all so painful how long it is taking.