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

[mightyspur]

I did post something webberg had posted (he is a principal at WTT) about the values seemingly high because they came in your 2019 return. Maybe read that again and then try to work out why yours is seemingly high.

I can only assume that srowell8 is saying he had no other of these type of schemes in the prior years and it is literally the 44 days he did via Procorre in this manner in 2019

[mightyspur]

I signed up with the Procorre LLP but not through my limited company so they had me as self-employed. I submitted a time sheet to Barclay Carter who invoiced the client. When the invoice was paid i submitted a drawings request to procorre. So the process was similar to others - the issue for me is that I only did 1 project for 44 days (Value £x) but HMRC are saying my "loan" was (£x times 4) - so i am really not sure where this number comes from - from reading your note the loan value would be the value that you received into your bank account (is that correct ?).

The 'loan' is any funds received via the overdrawn capital account, as it is a 'credit facility', paid into your personal account under the remit of "Business Development allowance". I also assume they include payments made to the expense account card that was issued to cover expenses when looking to introduce colleagues to Procorre. Sounds like you are willing to settle, so you need to appeal the amount and prove to HMRC what you actually did receive from Procorre and offer to settle the tax due on that, rather than the figure they have assumed.

[Fred Bloggs]

The 'loan' is any funds received via the overdrawn capital account, as it is a 'credit facility', paid into your personal account under the remit of "Business Development allowance". I also assume they include payments made to the expense account card that was issued to cover expenses when looking to introduce colleagues to Procorre. Sounds like you are willing to settle, so you need to appeal the amount and prove to HMRC what you actually did receive from Procorre and offer to settle the tax due on that, rather than the figure they have assumed.

I think that's a pragmatic approach. Anyone considering actually fighting against HMRC in an attempt to not pay tax needs to think very realistically about what the chances of success really are. I don't believe a single tax avoidance scheme has been successful going down that route. Yet.

[DealorNoDeal]

I think that's a pragmatic approach. Anyone considering actually fighting against HMRC in an attempt to not pay tax needs to think very realistically about what the chances of success really are. I don't believe a single tax avoidance scheme has been successful going down that route. Yet.

And be prepared to fork out £thousands in fees to advisors/barristers etc.

I haven't heard of a single scheme going to tribunal and winning, so this really is a long shot.

[srowell8]

I think that's a pragmatic approach. Anyone considering actually fighting against HMRC in an attempt to not pay tax needs to think very realistically about what the chances of success really are. I don't believe a single tax avoidance scheme has been successful going down that route. Yet.

Thanks - that would seem logical. I never even wanted to use Procorre but the end client (a large utility) wouldn't use sole traders for contracts at the time. 44 days work I would happily have given up now !

[Fred Bloggs]

Thanks - that would seem logical. I never even wanted to use Procorre but the end client (a large utility) wouldn't use sole traders for contracts at the time. 44 days work I would happily have given up now !

My take would be that for 44 days worth of work it doesn't take a lot of thinking about. Get all the numbers together so you can show exactly what went on and what money went where. Take a deep breath and see where it takes you.

[peasant2023]

OK quick summary we have two options one is to settle and argue the amount with HMRC or the 2nd option is to join the tribunal group and fight it out, this could take 2-5 years say, and WTT think they have 60-70% chance of winning. Both have costs but I wont say that here as that is not my business. He also pointed me to the LCAG group and a law firm. So I guess its time for me to take my head out of the sand and do some research and find all documentation I can to see if I can reduce the amount HMRC think I owe.

Is it possible for you to proceed with WTT with the intention of making a settlement, but also continue to challenge it via the Tribunal group?
It would seem a lot safer if possible…

The great concern would be that some people who might be able to settle this thing in the near future (i.e. next few years given how many cases HMRC seem to be processing), without having their lives destroyed beyond any hope of recovery,
may find themselves in a truly hopeless situation by trying to challenge this for 5 years, and then being hit by 5 additional years of interest and penalties, if it fails.
It’s not at all difficult to see how that could result in wave of suicides (or indeed, a worse type of escalation, if someone loses their mind under the strain)

[Fred Bloggs]

Is it possible for you to proceed with WTT with the intention of making a settlement, but also continue to challenge it via the Tribunal group?
It would seem a lot safer if possible…

The great concern would be that some people who might be able to settle this thing in the near future (i.e. next few years given how many cases HMRC seem to be processing), without having their lives destroyed beyond any hope of recovery,
may find themselves in a truly hopeless situation by trying to challenge this for 5 years, and then being hit by 5 additional years of interest and penalties, if it fails.
It’s not at all difficult to see how that could result in wave of suicides (or indeed, a worse type of escalation, if someone loses their mind under the strain)

If you take a final settlement with HMRC and by some miracle a tribunal then over turned the scheme's liability, you won't get anything back that you paid to settle. Personally I think there's a snowball chance in hell that any tax avoidance scheme will ultimately be proven to work. There's way too much at stake for the government finances to allow a contrived scheme dreamt up in a bedroom and backed by dodgy legal counsel opinion to win a case. Overnight the treasury tax receipts would collapse if that were to happen. That just isn't going to happen. Nor should it.

But individuals must of course form their own opinion. I'm nobody to say what will happen,

[frontmen242]

Is it possible for you to proceed with WTT with the intention of making a settlement, but also continue to challenge it via the Tribunal group?
It would seem a lot safer if possible…

The great concern would be that some people who might be able to settle this thing in the near future (i.e. next few years given how many cases HMRC seem to be processing), without having their lives destroyed beyond any hope of recovery,
may find themselves in a truly hopeless situation by trying to challenge this for 5 years, and then being hit by 5 additional years of interest and penalties, if it fails.
It’s not at all difficult to see how that could result in wave of suicides (or indeed, a worse type of escalation, if someone loses their mind under the strain)

What you can do is initiate the settlement and see what the final figures they offer you are and if they are not acceptable you dont have to sign on the dotted line to continue you could go the tribunal route if that is an option to you....it is down to choices and how long you want to drag this out, health and wealth permitting....

[DealorNoDeal]

Personally I think there's a snowball chance in hell that any tax avoidance scheme will ultimately be proven to work.

I don't think anyone in their right mind would try flogging that dead horse.

If you look at all the recent cases (Hoey, Higgs, Lancashire), it's all about trying to shift the liability elsewhere (deemed employer, agency) and claiming a tax credit. But that hasn't achieved diddly squat so far either.

I don't know what WTT are smoking, quoting a 60-70% chance of winning, but that sounds like pie in the sky to me.