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

[cojak]

No, you are not allowed to share your number.

And I will add this:

A word of warning Ladies and Gentlemen.

In the past we have had scheme advisors pretending to be punters caught up in this kind of mess.

Their modis operandi is to ask you to contact them using email away from the forum (either publicly or via PMs), and then try to persuade you to to drop proceedings/provide you with false information and certainly to stop posting negative things about the original scheme or the debt collectors (presumably to try and keep the brand ‘clean’).

Be aware of those who try this, test the waters of any WhatsApp group for this kind of thing happening.

And let the Mods know what is happening, we will deal with the forums our end without letting on who informed us.

[mightyspur]

HMRC have been investigating me for nearly a year relating to my 2018-19 tax return, where at the time my Personal Service Company (PSC) was working via an LLP relationship with Procorre operating as a bare trustee for the LLP.

I engaged with my accountant to opine on the proposal with the partnership i.e. gather their opinion to ensure it was a legitimate arrangement. My accountant spoke directly with a Senior Partner at Procorre to get more information. I asked Procorre at the time of joining if there were any issues from a tax perspective with this arrangement and they responded saying an LLP is a legal entity and they are not running any scheme, which I have in an email. I therefore made the decision to join, as I felt the support and potential future opportunities they offered independent contractors, would assist my experience in contracting in addition to the other service options of private health care, reduced ltd company insurance and their potential of "profit share", to potentially increase my income.

I had been a partner with Procorre for approximately 9 months before they then offered to acquire my PSC. They valued my company, and offered to purchase 96% of the shares in it. I was not privy to the calculation used for this valuation but have been informed it was calculated based on the monetisation projections from my network, clients and project opportunities and my accountant felt it was a fair offer. As I disposed of my shares in my PSC, I paid capital gains tax (applying Entrepreneurial relief) on the full valuation in accordance with UK tax legislation in 2019.

HMRC are stating that the sole reason I entered into this new arrangement with Procorre, was so I could get out of previous loan arrangements and avoid paying the loan charge on the outstanding amounts and they bizarrely consider the loans, as of the 5 April 2019 to be the total amount my company was valued at.

HMRC believe the valuation of my company was an artificial amount made purely to extinguish the value of these "loans", which I assume related to payments made into an overdrawn capital account, in the 9 months I was a partner prior to the acquisition. These amounts were paid directly into my personal account and related to "Business Development activities" that I undertook as a Procorre consultant. As I was a self-employed partner of a partnership and a member of Procorre I was advised by them that I only had to pay tax on allocated profits when they were announced, so the payment received in March was not declared on my 2016-17 Self-Assessment. Procorre advised me that these payments, "allowed me to receive capital amounts in anticipation of future income profit allocations made". The total amount I received from this was less than £15k over the 9-month period, before my company was acquired.

As part of the acquisition Procorre said (with regards to these payments) "The position on the payments received in 2017, as the value only equated to circa £15k it has been reconciled by ourselves and as such does not need to be declared against your self-assessment". This statement was not questioned by my accountant, and I have always acted under advice from tax advisors when completing my returns.

With my limited understanding of all this, I can understand HMRCs position in classifying these amounts received as a credit facility that I should have paid tax on, and had Procorre announced the allocated profits relating to these payments, I would have paid something.

With all that is said and done, despite the assurances from Procorre that it was all above board and reconciled by them as part of the acquisition, had HMRC said it was these payments that the tax needed to be paid on, I probably would have just paid the demand outlining that amount. How HMRC have plucked the full sum my company was valued at and classified it as "income" in 2019 though and are now taxing me on, seems absurd.

Procorre Legal have been assisting with my responses to HMRC, but they are slow to offer guidance or support. Sending me letters to respond with merely days before the deadline, or even on the day/late, with little or no time for me to ask them questions (to which they don't respond to either). I assume perhaps because I am no longer involved directly with them, and they are getting a lot of enquiries from existing and old partners with various HMRC investigations I am not a priority.

This whole demand is even more stressful based on the fact I have read that if I do pay the demand in full, and then it is discovered that no tax was actually due, I would not be entitled to get that money back as it is effectively a voluntary settlement (unless I have misunderstood), so as you can imagine, I am very worried about what is going to happen. I would have to look to try and take a 2nd mortgage or get a secured loan on my house, which I really do not want to have to do, as it will put a huge strain on our personal finances. My mental health is already taking a hit with sleepless nights and episodes of depression where I find myself worrying how I will be able to fight this and support my family.

I am in the process of talking with a new, independent tax advisor on all of this, so hopefully they can offer a little bit of light.

If anyone on here is in a similar position to me and wants to offer some guidance or provide insight I would be most grateful.

[TQMUK]

Good afternoon.
I have just received a similar tax demand for non-payment of taxes and National Insurance Contributions.

I would like to ask whoever is also being harassed by the HMRC to let me know, so that we can form a group to challenge the HMRC, and I can show screenshots of the
promised made by Procorre re their payment 'schemes'.

Please let me know if you would like to form an action group, so that we can coordinate our efforts as one group.

If enough people group together to fight this outrageous situation Procorre have put us all into, we can challenge the HMRC re their demands.

Please reply with YES, and once I see the interest level, I will provide a neutral email address for us all to start gathering our details,
which I can then engage with a suitably qualified lawyer to represent us all.

Thank you.

Paul.

[cojak]

And I repeat my earlier post.

No, you are not allowed to share your number.

And I will add this:

A word of warning Ladies and Gentlemen.

In the past we have had scheme advisors pretending to be punters caught up in this kind of mess.

Their modis operandi is to ask you to contact them using email away from the forum (either publicly or via PMs), and then try to persuade you to to drop proceedings/provide you with false information and certainly to stop posting negative things about the original scheme or the debt collectors (presumably to try and keep the brand ‘clean’).

Be aware of those who try this, test the waters of any WhatsApp group for this kind of thing happening.

And let the Mods know what is happening, we will deal with the forums our end without letting on who informed us.

If this doesn't happen, then what you do is up to you.

[navemitt001]

HMRC have been investigating me for nearly a year relating to my 2018-19 tax return, where at the time my Personal Service Company (PSC) was working via an LLP relationship with Procorre operating as a bare trustee for the LLP.

I engaged with my accountant to opine on the proposal with the partnership i.e. gather their opinion to ensure it was a legitimate arrangement. My accountant spoke directly with a Senior Partner at Procorre to get more information. I asked Procorre at the time of joining if there were any issues from a tax perspective with this arrangement and they responded saying an LLP is a legal entity and they are not running any scheme, which I have in an email. I therefore made the decision to join, as I felt the support and potential future opportunities they offered independent contractors, would assist my experience in contracting in addition to the other service options of private health care, reduced ltd company insurance and their potential of "profit share", to potentially increase my income.

I had been a partner with Procorre for approximately 9 months before they then offered to acquire my PSC. They valued my company, and offered to purchase 96% of the shares in it. I was not privy to the calculation used for this valuation but have been informed it was calculated based on the monetisation projections from my network, clients and project opportunities and my accountant felt it was a fair offer. As I disposed of my shares in my PSC, I paid capital gains tax (applying Entrepreneurial relief) on the full valuation in accordance with UK tax legislation in 2019.

HMRC are stating that the sole reason I entered into this new arrangement with Procorre, was so I could get out of previous loan arrangements and avoid paying the loan charge on the outstanding amounts and they bizarrely consider the loans, as of the 5 April 2019 to be the total amount my company was valued at.

HMRC believe the valuation of my company was an artificial amount made purely to extinguish the value of these "loans", which I assume related to payments made into an overdrawn capital account, in the 9 months I was a partner prior to the acquisition. These amounts were paid directly into my personal account and related to "Business Development activities" that I undertook as a Procorre consultant. As I was a self-employed partner of a partnership and a member of Procorre I was advised by them that I only had to pay tax on allocated profits when they were announced, so the payment received in March was not declared on my 2016-17 Self-Assessment. Procorre advised me that these payments, "allowed me to receive capital amounts in anticipation of future income profit allocations made". The total amount I received from this was less than £15k over the 9-month period, before my company was acquired.

As part of the acquisition Procorre said (with regards to these payments) "The position on the payments received in 2017, as the value only equated to circa £15k it has been reconciled by ourselves and as such does not need to be declared against your self-assessment". This statement was not questioned by my accountant, and I have always acted under advice from tax advisors when completing my returns.

With my limited understanding of all this, I can understand HMRCs position in classifying these amounts received as a credit facility that I should have paid tax on, and had Procorre announced the allocated profits relating to these payments, I would have paid something.

With all that is said and done, despite the assurances from Procorre that it was all above board and reconciled by them as part of the acquisition, had HMRC said it was these payments that the tax needed to be paid on, I probably would have just paid the demand outlining that amount. How HMRC have plucked the full sum my company was valued at and classified it as "income" in 2019 though and are now taxing me on, seems absurd.

Procorre Legal have been assisting with my responses to HMRC, but they are slow to offer guidance or support. Sending me letters to respond with merely days before the deadline, or even on the day/late, with little or no time for me to ask them questions (to which they don't respond to either). I assume perhaps because I am no longer involved directly with them, and they are getting a lot of enquiries from existing and old partners with various HMRC investigations I am not a priority.

This whole demand is even more stressful based on the fact I have read that if I do pay the demand in full, and then it is discovered that no tax was actually due, I would not be entitled to get that money back as it is effectively a voluntary settlement (unless I have misunderstood), so as you can imagine, I am very worried about what is going to happen. I would have to look to try and take a 2nd mortgage or get a secured loan on my house, which I really do not want to have to do, as it will put a huge strain on our personal finances. My mental health is already taking a hit with sleepless nights and episodes of depression where I find myself worrying how I will be able to fight this and support my family.

I am in the process of talking with a new, independent tax advisor on all of this, so hopefully they can offer a little bit of light.

If anyone on here is in a similar position to me and wants to offer some guidance or provide insight I would be most grateful.

I have also recieved a Reg 80 determination and Section 8 notice. The amount being quoted is just not comprehensible. Reached out to Procorre and they have said that HMRC gave me 30 days to respond so they will respond within that timeframe. STress Levels high. Any recommendations on a tax advisor?

[navemitt001]

I’m not sure what I can say about the current status of the court cases which may weaken their position so I’ll say nothing, but trust me when I say they are fighting the good fight.
approaching this from a human angle 10 people are no longer with us as a direct result of HMRC’s application of this cursed Loan Charge and that’s 10 people too many. As a single entity the thought of fighting this as a large collective gives me enormous comfort and reassurance that we have the necessary resources to at least get a more favorable outcome.
you have two choices - pay HMRC what they ask, or fight it and if you lose pay HMRC what they ask.
I cant afford the former from a purely financial basis, so my choices are limited, so how do I fight them? In a big gang or on my own? No brainer for me.we don’t have to win the war…I’ll take a draw at this point. Would I pay 20% tomorrow to be done with it? Absolutely. Is that a possibility? Maybe? ??♂️

I have reached out to the WTT and have a call scheduled. Fingers crossed they give some confidence. However, am inclined more towards finding a tax advisor and settling for a manageable amount!! Cant believe this is happening....everyday curse myself for going for Procorre....they had such a big netwroking event and with all the people around and confident pitches. No one to blame but myself.

[mightyspur]

I have also recieved a Reg 80 determination and Section 8 notice. The amount being quoted is just not comprehensible. Reached out to Procorre and they have said that HMRC gave me 30 days to respond so they will respond within that timeframe. STress Levels high. Any recommendations on a tax advisor?

I reached out to the LCAG and they recommended I spoke to WTT, and also have a call scheduled. It will be interesting to hear what they have to say, because like you, the amount HMRC are claiming as income and are now taxing me on is bizarre. I never received the amount my company was valued at as income prior to the valuation and was only with Procorre for 9 months prior to the acquisition. I provided HMRC my personal statements showing the income from the Business Development activities and there is no record of ever having received the total valuation amount.

I'm annoyed at myself for getting sucked in and have gone back over my communications with Procorre and between myself and my accountant when I was being courted and it was obvious I had my doubts, but at the time I had concerns over my contracts being extended and thought being a part of a larger partnership would open opportunities for me via their contract placements team. The additional benefits like lower insurances, help with mortgage advisors, health care etc were all very appealing. Plus this mythical profit share they discussed. The reduced tax liabilities due to the arrangement were fairly minimal and I even asked them and my accountant if it was legitimate.

[navemitt001]

I reached out to the LCAG and they recommended I spoke to WTT, and also have a call scheduled. It will be interesting to hear what they have to say, because like you, the amount HMRC are claiming as income and are now taxing me on is bizarre. I never received the amount my company was valued at as income prior to the valuation and was only with Procorre for 9 months prior to the acquisition. I provided HMRC my personal statements showing the income from the Business Development activities and there is no record of ever having received the total valuation amount.

I'm annoyed at myself for getting sucked in and have gone back over my communications with Procorre and between myself and my accountant when I was being courted and it was obvious I had my doubts, but at the time I had concerns over my contracts being extended and thought being a part of a larger partnership would open opportunities for me via their contract placements team. The additional benefits like lower insurances, help with mortgage advisors, health care etc were all very appealing. Plus this mythical profit share they discussed. The reduced tax liabilities due to the arrangement were fairly minimal and I even asked them and my accountant if it was legitimate.

Me too....big community, contracts help, other benefits like reduced company insurance...all sucked me in. It was about being part of a bigger community without the baggage of being permanent employee. Was there for only a year. I am starting to feel sorry for myself but then I am the one who did not listen to warning signs. The person who introduced me did not have any understanding of how to run a contractor company and was happy working with Procorre because he did not have to worry about anything.

[mightyspur]

I had a conversation with WTT and he was very helpful. It seems that the vast majority of people who went through the acquisition all had their companies valued to the same amounts (or there about) that existed in the overdrawn capital account, so despite me showing what I received via the "Business Development fund" from my personal statements, HMRC think my valuation was also to wipe out this mythical balance. I now need to appeal the amounts and hope to get a settlement on the taxes that should be due on the money I actually did receive in the 9 months prior. Hopefully they are willing to accept it and this doesn't drag on.

[Curlymc]

I nearly had a heart attack when I received the notification and initially couldn't work out how they had "created" the figure that I owed, but then I remembered the acquisition. Unsurprisingly when I tried to contact Procorre there was radio silence. It has given me some comfort that I'm not the only one in the same boat. I'm just wondering if there is something we could all collectively do some how, even if it is to set up another thread/group so that we can share information / advice.