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

[DCContract]

Has anyone made any progress yet?

Interested to know if anyone has taken any independent legal advice on this yet or whether anyone has successfully applied for entrepreneurs relief having taken up Procorre on their offer to acquire your company?

Also interested in the webinar if someone can ping me a link to it.

Thanks

[webberg]

I would be really interested in seeing the webinar.

It's audio only.

(I'm told I have a face for radio).

PM me and we'll see what can be done.

[Benson77]

I would be really interested in seeing the webinar.

[webberg]

You need some legal advice.

I'm unclear how you can be forced to do anything and I'm pretty sure that an unfair contract can be laid aside and even it is not unfair, then perhaps it cannot be exercised in the UK?

You need to have a word with your agency/end client and explain the position. Arrange to invoice them directly or via a new PSC.

I cannot say that you should cease sending money to Procorre as I'm not a lawyer and cannot guess as to the consequences, but I think a suspension of payments whilst you sort out the legal position is a reasonable thing to do.

As I say, you need legal and tax advice that is independent.

The legal advice, probably requiring some cross border expertise, may not be cheap, but in the long run will be worth it.

[Benson77]

The alarm bells are now deafening, but its to late now and I cant turn back the clock. I have read the posts you've mentioned but as you say none of it is definitive and this is where I'm having trouble in deciding what to do next.

I have managed now to get an itemized list of withdrawals and it appears it marries up with the BDF payments.

I worry that if the business is sold and I try to walk away then maybe I will be liable for even more money, possibly owing procorre the value they put on the company?

My issue with burnside is that not once did they mention this account I was overdrawing and maybe they didn't have to but they certainly knew about it and told me that now I'm aware of it I should get figures from procorre and burnside will then help me with thow to pay the tax on it but so far their answer is to pay it back, pay the tax, sell the company - none of those are great options.

[dog]

Hi Webberg, I did join the WhatsApp group and its good to get others opinions but no one as yet (that ive spoken to) has got any further forward with this than I have, so its a bit like unexplored territory!

Burnside are one of Procorres preferred accountants, I have sought advice but they are finding it all very vague. I'm possibly looking in the wrong place, its easy to say yes just pay the tax on it and that's fine but as I say all information to do with this over drawn capital account is very vague, I cant just pay money to someone whos asked for it, anyone could do that.

Benson, I had previously thought Burnside were ok but now I am questioning that. Procorre also have preferred legal advisers (you pay their fees) to advise you about the acquisition, presumably Burnside are also charging a fee for this as well. I have nothing against paying advisers fees for bone fide work. Who has validated the overdrawn capital account balance? [sounds like procorre are just spouting a figure at you] How much are procorre declaring as profit share for you? Have procorre actually done a re capitalisation?

I believe (my post 238) Procorre have cash flow problems and need to your future income - this is what is driving this ballony from Procorre. Paying tax isnt ballony but Procorre luring you into a 'forced' sale is.

Hey, just suppose you go ahead and sell your business to procorre... why do you then 'have to' continue paying procorre for 3 years afterwards? Why dont you just sell them your business and then start a new company with new accountants and never make payments to procorre again?

[webberg]

Hi Webberg, I did join the WhatsApp group and its good to get others opinions but no one as yet (that ive spoken to) has got any further forward with this than I have, so its a bit like unexplored territory!

Burnside are one of Procorres preferred accountants, I have sought advice but they are finding it all very vague. I'm possibly looking in the wrong place, its easy to say yes just pay the tax on it and that's fine but as I say all information to do with this over drawn capital account is very vague, I cant just pay money to someone whos asked for it, anyone could do that.

We did a webinar for the Whatsapp group a couple of weeks ago. I'm sure that ITMark can make the recording available.

We don't have a final answer because our information is incomplete, but we have enough of an answer to provide a different conclusion than you seem to have at the moment.

Obviously I cannot comment on Burnside.

Partnership taxation is difficult. Where the partnership is offshore it is more so. There have been some excellent posts on these threads from Iliketax which explore whether the partnership is seen as that in the UK. It may not be. That will make a difference. I recommend that you search his posts.

Ultimately if you are involved in something that you don't understand and which an adviser cannot explain to you, alarm bells should be ringing.

[Benson77]

Hi Webberg, I did join the WhatsApp group and its good to get others opinions but no one as yet (that ive spoken to) has got any further forward with this than I have, so its a bit like unexplored territory!

Burnside are one of Procorres preferred accountants, I have sought advice but they are finding it all very vague. I'm possibly looking in the wrong place, its easy to say yes just pay the tax on it and that's fine but as I say all information to do with this over drawn capital account is very vague, I cant just pay money to someone whos asked for it, anyone could do that.

[Marsh59]

You just need to request PM rights on here and one of the admins will give access, then just ping me.

I am also involved in this with Procorre

Admin - can I have PM rights on here please

[webberg]

I don't know who Burnside is/are, nor the connection they have, if any, with Procorre.

I would say however that you should go and get some independent advice.

The threads here have some. There are advisers here (me, Phil) who can help. There is a group of people using the scheme who have grouped together and can be contacted via a poster called ITMark.

You need to pause and get another view before getting more deeply involved here because ultimately HMRC will see this as a form of avoidance and will investigate. If they think they have a case, they will not be gentle given the now well known position they have.

Using tax relief intended to encourage entrepreneurship for what HMRC will claim is nothing more than avoidance is usually not a great idea.