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

[Paralytic]

I was a sole-trader so didn't sell my business to them thankfully.

Are you sure you were a sole-trader, and not a one-man ltd company (PSC)?

[srowell8]

Are you sure you were a sole-trader, and not a one-man ltd company (PSC)?

Yes ...i had a limited company later but didn't do any work with Procorre

[Paralytic]

Yes ...i had a limited company later but didn't do any work with Procorre

So you weren't a sole trader.

[srowell8]

So you weren't a sole trader.

So the work i did for Procorre was outside of the limited company and the paid me directly not through the business.

[GregRickshaw]

I am a 1st time poster on here having received an HMRC disguised loan demand yesterday. I did 1 contract for Procorre in 2014 for a relatively low value over 6 months now I have a tax demand for nearly 3x the value of the money I received - surely this can't be correct/legal etc. I have a call with WTT tomorrow and seeing this thread they seem to be the people who are looking into this for a number of people. My accountant is holding me back from talking to Procorre just now. I have a couple of questions 1 - Has anyone on here actually reached a resolution with HMRC 2 - I don't fully understand the loan value as I never received this money can someone explain ? . I was a sole-trader so didn't sell my business to them thankfully. Many thanks

This may help

Webberg from WTT has posted this on LinkedIn regarding the reason for the high amount you are seeing. HTH

"The simple answer is that most 2018/19 discovery assessments claim to be in respect of the loan charge.

The loan charge is a tax specific to those who have used disguised remuneration schemes, principally therefore contractors and owners of small/medium businesses who used EBTs.

The loan charge adds to your 2018/19 income, all unpaid loans that have arisen from the use of schemes between 9th December 2010 to 5th April 2019.

So if you get an assessment and think "I've never earned that in 2018/19", think about the loans from the period above, add them to earnings in 18/19 and you'll get very close to the scary number on the assessment."

[srowell8]

This may help

Webberg from WTT has posted this on LinkedIn regarding the reason for the high amount you are seeing. HTH

"The simple answer is that most 2018/19 discovery assessments claim to be in respect of the loan charge.

The loan charge is a tax specific to those who have used disguised remuneration schemes, principally therefore contractors and owners of small/medium businesses who used EBTs.

The loan charge adds to your 2018/19 income, all unpaid loans that have arisen from the use of schemes between 9th December 2010 to 5th April 2019.

So if you get an assessment and think "I've never earned that in 2018/19", think about the loans from the period above, add them to earnings in 18/19 and you'll get very close to the scary number on the assessment."

So the correct "loan" value is the bit that's not clear - is that the value i actually received from Procorre or something else - the figure from HMRC appears very large and very random, certainly not my (2018/2019 total income) + (2015/2016 Procorre payments/loan ?) ?

[Paralytic]

So the work i did for Procorre was outside of the limited company and the paid me directly not through the business.

Ah, I hadn't realise it worked like that - sounds different to the other schemes.

Is the HMRC amount greater than the total that was billed to the client when you were with Procorre?

[srowell8]

Ah, I hadn't realise it worked like that - sounds different to the other schemes.

Is the HMRC amount greater than the total that was billed to the client when you were with Procorre?

Yes about 4x bigger - random number ?

[Paralytic]

Yes about 4x bigger - random number ?

HMRC may well have looked at your subsequent tax returns and assumed you were with Procorre for those years too. Have you tried adding those figures up? Did you divulge Procorre in your tax return for the year you were with them?

You've taken the right route by getting advice (call with WTT tomorrow) - the outcome may be asking HMRC where they get their figure wrong, and pointing out that you were with Procorre for that year only, and then accepting you need to pay out for the 6 monhts you were with them.

[frontmen242]

OK chaps I had my call with WTT today and feel a lot calmer over this, I do recommend speaking with WTT they know their stuff.... not sure I am going to wait for Procorre to come back with a generic answer to be honest, its not in their interest to help so looking at other options. One is lodging an appeal myself which I hope to buy me some breathing space before deciding next steps. Either way this is going to cost but trying to lessen the amount is my goal.