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

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  • dog
    replied
    Originally posted by Benson77 View Post
    I would have had no problem in paying the tax as it fell but never having had a statement i was fairly ignorant to the amount building and definitely had a lack of understanding in what was happening, i simply can't afford the 40k tax bill i now have, and yes that seems to be my fault i know. I now have to unfortunately seriously consider taking the acquisition as i see no other affordable way out. I have no dividends to take out only some expenses that i took into the business when starting up.
    What are procorre actually saying about this?

    According to procorre the acquisition opportunity is to acquire a stake in procorre, deepen your relationship with them and enhance your income.

    I suspect this is really about procorre securing future income from your endeavours. I would presume Procorre need your money/company more than you need procorre ..
    Last edited by dog; 11 June 2018, 21:05.

    Leave a comment:


  • Benson77
    replied
    I would have had no problem in paying the tax as it fell but never having had a statement i was fairly ignorant to the amount building and definitely had a lack of understanding in what was happening, i simply can't afford the 40k tax bill i now have, and yes that seems to be my fault i know. I now have to unfortunately seriously consider taking the acquisition as i see no other affordable way out. I have no dividends to take out only some expenses that i took into the business when starting up.

    Leave a comment:


  • dog
    replied
    Originally posted by Benson77 View Post
    Has anyone actually managed to leave procorre cleanly and their preferred accountants?
    Did you pay the tax on the overdrawn capital account or did you somehow manage to reduce the cost?
    Start a new contract and stop paying procorre.

    Are procorre's preferred accountants really the problem here?

    When u stop paying procorre, the accountants then help you take you dividends out of your company. U pay tax on your dividends.

    I have heard procorre are going to raise equity funds (which incidentally lessens the value of any equity stake u would get in procorre by selling your company to them).

    I suspect the reason why procorre need to raise equity funds has something to do with procorre's income falling off a cliff after April 2017's IR35 changes in the public sector and public sector contractors being forced to leave procorre because the procorre psc structure has been incompatible with contracting in the public sector since April 2017.

    I also suspect procorre will say their fund raising marks expansion into new private sector commercial projects like 'medical devices' (you know the stuff procorre go on and on about but never really seems to have any substance)

    On a side note I have been pruning / blocking procorre contacts on my LinkedIn. Whilst I was doing this I noticed some of them no longer work at procorre.

    My opinion is procorre have funding problems, need to recapitalise and wanted more to sign up to the acquisition opportunity but there haven't been enough takers... so now they are looking to raise funds with some carrot to keep contractors on board.
    Last edited by dog; 12 June 2018, 23:55.

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  • Benson77
    replied
    Has anyone actually managed to leave procorre cleanly and their preferred accountants?
    Did you pay the tax on the overdrawn capital account or did you somehow manage to reduce the cost?

    Leave a comment:


  • dog
    replied
    corre holdings and procorre

    Procorre seem to have become corre holdings and now there is a solicitor involved advising people dumb enough to deepen their relationship with corre holdings [aka procorre - why have they changed their name?]

    https://www.gregglatchams.com/pscenquiries/

    https://www.moneyhouse.ch/en/company...-sa-6016704481

    any idea what the worth is of having an equity stake in corre holdings? i ask because according to what corre holdings say this is one of the benefits of selling your psc to procorre.

    Leave a comment:


  • Iliketax
    replied
    Originally posted by Benson77 View Post
    Answer

    Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. HMRC do not like LLPs as a result of the exposure of several dubious practices, not to mention downright tax evasion in this area. To HMRC LLP equates to a racket! If your capital account is overdrawn then you should be repaying it in full on the dissolution of the partnership. If the liquidator is prepared to accept a settlement for less than the sum owing then by your figures you would be up some 40K. This would be a capital gain and, after deducting your Annual Exempt Amount (AEA) of 11.1K would leave some 28.9K exposed to Capital Gains Tax (CGT) levied at 18% or 28% or a combination of the two rates depending on your income including the gain in the tax year of dissolution. There is a possibility, if you are going out of this business altogether, that you would be entitled to Entrepreneurs' Relief (ER) which limits the tax to a flat rate 10%. A worst case scenario would be a tax bill of a tad over 8K, but you might get away with just under 3K if ER applies. I do hope that you have found my reply of some assistance.
    A quick Google suggests that Keith wrote that two years ago. At that time Keith probably did not know enough about (i) the April 2019 loan charge, and (ii) the self-employed disguised remuneration rules. Both became law in November 2017.

    Even with those new rules, if the LLP was genuinely never profitable then the April 2019 loan charge would almost certainly not apply. But it would be different if it was part of an arrangement to get a tax advantage.

    Leave a comment:


  • Benson77
    replied
    Came across this elsewhere, thought it might be of interest.

    Hi there
    Until last year I was a partner in an LLP. The LLP was not profitable over a long period of time and went into liquidation last year with some large debts to HMRC.
    I also have an overdrawn capital account to the LLP. The liquidator has invited me to make an offer to settle the capital account and I am assessing the affordability of various offers that I could make. There is one outstanding question which I am struggling to get a clear answer on, from either the liquidator, a second liquidator, or my accountant. That question is whether I would have to pay tax on the written-off portion of my overdrawn capital account.
    For the sake of argument, let's say that my capital account is overdrawn to the tune of £50k. If I make an offer of £10k to the liquidator, and that is accepted, then £40k is written off. But, it would make sense to me that HMRC would view that £40k as income that I have received, and would expect me to pay income tax on it.
    I need to get an understanding of a) whether that is accurate and b) what the mechanism would be for HMRC being informed of that income and collecting that tax (i.e. via self assessment?)
    The affordability of my offer to the liquidator is obviously affected by this question of taxation, as I need to plan for the full amount I would ultimately have to pay.
    Could someone provide any clarity here?


    Answer

    Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. HMRC do not like LLPs as a result of the exposure of several dubious practices, not to mention downright tax evasion in this area. To HMRC LLP equates to a racket! If your capital account is overdrawn then you should be repaying it in full on the dissolution of the partnership. If the liquidator is prepared to accept a settlement for less than the sum owing then by your figures you would be up some 40K. This would be a capital gain and, after deducting your Annual Exempt Amount (AEA) of 11.1K would leave some 28.9K exposed to Capital Gains Tax (CGT) levied at 18% or 28% or a combination of the two rates depending on your income including the gain in the tax year of dissolution. There is a possibility, if you are going out of this business altogether, that you would be entitled to Entrepreneurs' Relief (ER) which limits the tax to a flat rate 10%. A worst case scenario would be a tax bill of a tad over 8K, but you might get away with just under 3K if ER applies. I do hope that you have found my reply of some assistance.

    Leave a comment:


  • dog
    replied
    Originally posted by webberg View Post
    He's a poster here and can be contacted via PM.

    I think you need to have made a minimum of 5(?) posts before you get PM rights.
    Can I have PM rights please

    Leave a comment:


  • webberg
    replied
    Originally posted by Marsh59 View Post
    Thanks for the advice, I've never heard of ITMark, do you have a direct link to the group?
    He's a poster here and can be contacted via PM.

    I think you need to have made a minimum of 5(?) posts before you get PM rights.

    Leave a comment:


  • Marsh59
    replied
    Originally posted by webberg View Post
    What do you think Procorre can do if you stop paying?

    The chances of the scheme working as advertised are, in my opinion, low.

    You have had little in the way of risk warnings and I'm sure a number fo legal types would be claiming that you could sue on those grounds alone.

    I think your best bet is to get together with the group already formed via ITMark - stop payments - if you get something that needs action, then do it as a group.

    Thanks for the advice, I've never heard of ITMark, do you have a direct link to the group?

    Leave a comment:

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