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

[Smurfburger]

Presumably you'll need to be armed with a statement of your current capital overdrawn account balance, which one would assume should be easily obtained from your LLP, as part of the 2019 loan charge declaration. I can see the logic in paying the tax as you are getting these 'profit allocations', but I'm guessing that something more official *cough* than just taking LLP overdrawn account payments and reducing them by the profit allocation amounts, is not the same as being provided proper balances from the LLP.

My fear is that HMRC simply state that despite paying this tax in good faith, that they need more proof than what is being stated to them. Obviously playing worse case scenario here, but hey, we are living in those kind of times.

I've never had any proper accounts, or statements, despite being promised them.

I don't think any of us have but Glen May must have to file accounts in Singapore.

[Smurfburger]

Silly question may be, but why is an overseas LLP so worried about the 2019 changes as they do not need to comply? Clearly HMRC are coming to us individually as UK tax payers. I don't believe they have ever contacted the overseas LLP.

Or is that the LLP may be liable for the tax based on how it was set-up?

Overseas LLPs do have to comply.

It is not the loan charge that they are worried about. There is a separate legislation relating to LLPs and their deferral of profit share allocation. That runs alongside the loan charge.

[dog]

Yes, I don't know if procorre are reading this or not. I was being naive that organisations care about what people say of them. Guess procorre don't care.

Why do procorre have offices all over the world? Do they actually exist? Has anyone here been to any?

[Telco7676]

Silly question may be, but why is an overseas LLP so worried about the 2019 changes as they do not need to comply? Clearly HMRC are coming to us individually as UK tax payers. I don't believe they have ever contacted the overseas LLP.

Or is that the LLP may be liable for the tax based on how it was set-up?

Presumably you'll need to be armed with a statement of your current capital overdrawn account balance, which one would assume should be easily obtained from your LLP, as part of the 2019 loan charge declaration. I can see the logic in paying the tax as you are getting these 'profit allocations', but I'm guessing that something more official *cough* than just taking LLP overdrawn account payments and reducing them by the profit allocation amounts, is not the same as being provided proper balances from the LLP.

My fear is that HMRC simply state that despite paying this tax in good faith, that they need more proof than what is being stated to them. Obviously playing worse case scenario here, but hey, we are living in those kind of times.

I've never had any proper accounts, or statements, despite being promised them.

[nucastle]

I contacted Glen May to ask the period covered and they replied to say it was up to April 2016. The letter does not state it. However, it will all be declared against the 2017/2018 tax year anyway.

I am hopeful that declaring the profits will address some of the enquiries into these years. HMRC might contest the figures but at least tax is being paid, which is what has been missing previously.

Presumably you'll need to be armed with a statement of your current capital overdrawn account balance, which one would assume should be easily obtained from your LLP, as part of the 2019 loan charge declaration. I can see the logic in paying the tax as you are getting these 'profit allocations', but I'm guessing that something more official *cough* than just taking LLP overdrawn account payments and reducing them by the profit allocation amounts, is not the same as being provided proper balances from the LLP.

My fear is that HMRC simply state that despite paying this tax in good faith, that they need more proof than what is being stated to them. Obviously playing worse case scenario here, but hey, we are living in those kind of times.

I've never had any proper accounts, or statements, despite being promised them.

[Smurfburger]

Smurfburger - did Glen May reissue your letter with the coverage dates on it?
I assume they told you it covers 12/13, 13/14, 14/15 & 15/16?


Getting back on track; if we keep declaring the Profit Share figures on our tax returns, and paying the associated tax, surely that satisfies HMRC in regards to contested monies owed = PROBLEM GONE!

I contacted Glen May to ask the period covered and they replied to say it was up to April 2016. The letter does not state it. However, it will all be declared against the 2017/2018 tax year anyway.

I am hopeful that declaring the profits will address some of the enquiries into these years. HMRC might contest the figures but at least tax is being paid, which is what has been missing previously.

[Smurfburger]

Glen May LLP Profit Share Letters

That all hinges on the idea that it's entirely plausible to declare 'profits' 5-6 years after the fact, which if it was the case, HMRC would surely not have sent enquiry letters and raised discovery assessments retrospectively for the period in question. Plus, you could say it's more advantageous paying tax within your unused income bands at lower levels in the case of a DA/CLSO2, than it is having arbitrary profit allocations dumped on you when the LLP feels like it.

And of course, does the LLP still exist? Are you still a member? Which casts even more doubt on things.

It is plausible to defer declaration of profit share. However, a new legislation, with effect from April 2019, prevents the deferral of profit share. It also dictates that any outstanding years have to be declared. I suspect that is why Glen May has grouped multiple years together in this penultimate letter.

[TroyT]

That all hinges on the idea that it's entirely plausible to declare 'profits' 5-6 years after the fact, which if it was the case, HMRC would surely not have sent enquiry letters and raised discovery assessments retrospectively for the period in question. Plus, you could say it's more advantageous paying tax within your unused income bands at lower levels in the case of a DA/CLSO2, than it is having arbitrary profit allocations dumped on you when the LLP feels like it.

And of course, does the LLP still exist? Are you still a member? Which casts even more doubt on things.

So that’s a solid “maybe” then (in your opinion)
Just another grey area. That’s unusual for tax.

In saying that, it still seems plausible...and defendable (in my opinion).

I’m stuggling to figure out your stance:

Are you thinking; don’t declare the Profit Share figures and subsequently, don’t pay any additional tax in the hope/belief that it will all go away?

Or, declare the Profit Share and pay the tax on it?

Or are you leaning towards; just pay whatever tax figure HMRC decide is the outstanding amount?

[nucastle]

Smurfburger - did Glen May reissue your letter with the coverage dates on it?
I assume they told you it covers 12/13, 13/14, 14/15 & 15/16?


Getting back on track; if we keep declaring the Profit Share figures on our tax returns, and paying the associated tax, surely that satisfies HMRC in regards to contested monies owed = PROBLEM GONE!

That all hinges on the idea that it's entirely plausible to declare 'profits' 5-6 years after the fact, which if it was the case, HMRC would surely not have sent enquiry letters and raised discovery assessments retrospectively for the period in question. Plus, you could say it's more advantageous paying tax within your unused income bands at lower levels in the case of a DA/CLSO2, than it is having arbitrary profit allocations dumped on you when the LLP feels like it.

And of course, does the LLP still exist? Are you still a member? Which casts even more doubt on things.

[TroyT]

Profit Share Period

I have just had an email from Glen May stating that latest letters relate to the period up to April 2016.

Smurfburger - did Glen May reissue your letter with the coverage dates on it?
I assume they told you it covers 12/13, 13/14, 14/15 & 15/16?


Getting back on track; if we keep declaring the Profit Share figures on our tax returns, and paying the associated tax, surely that satisfies HMRC in regards to contested monies owed = PROBLEM GONE!