[Tax-Avoidance Scheme] Umbrella in Liquidation

[cojak]

There has been an alarming number of these schemes popping up so I'm collating all the regulars helpful posts into one thread.

If you have come here for this reason, read these posts. They will help you to decide what you have in front of you and what you need to do next.

Note that these umbrellas will disguise the fact that they are selling you a loan scheme, if you are using

* Advance payments
* Salary advance
* deferred payments
*Growth Shares Payment
* anything not a straight 'payment'

...means that you are in a loan scheme.

See this thread as well: https://www.contractoruk.com/forums/...umbrellas.html

[WTFH]

Help!

I've received an email from the Director of my old Umbrella Company stating that they have gone into liquidation. To put things frankly it was a dodgy umbrella company which used a salary advance as an additional payment. I left as soon as I realised the error of my ways and I am in the process of sorting my tax affairs with HMRC.

The Director has stated in the email that the liquidators MAY ask for repayment of these salary advances. They have then forwarded details of a specialist solicitor which he feels I may need if they do pursue these repayments? I did not receive any more money than my hourly contract rate.

Surely they cannot do this? Wanted to gain some sort of legal perspective and understanding of what is happening here? Any advice would be much appreciated.

Can you name the umbrella and the solicitor?

I suspect that if the umbrella is dodgy, the "solicitor" will be a company closely associated with them who are attempting to get more money out of their victims.

[Fred Bloggs]

The contract doesn’t mention the word loan anywhere. It just says a salary advance made against future earnings.

So it's a loan then. Secured against further earnings. Simple. They were not simply giving money away. From what's been said here, I think you were unwittingly using a tax avoidance scheme disguised as an umbrella company.

[piebaps]

Beeken was running a pub in the Isle of Man until 2012 and the impressive qualifications after his name relate to the institute of Marketing. he's not a lawyer, an accountant or a tax expert.

There's a helpful thread on loans here https://www.contractoruk.com/forums/...d-summary.html

A law firm called ETC was advising on the Felicitas loans and WTT were also advising and Google should find both (and I'm connected to neither BTW).

The recurring comments in the other loan threads was

1. HMRC are your most pressing problem. Sort them out first.
2. Find and understand your contractual arrangements.
3. Seek advice from someone other than their recommended stooge
4. Don't give them a penny

[eek]

Taken from piebaps link your current steps would be

1. Confirm where the letters are coming from so which jurisdiction you are dealing with (if its not the IoM it will be the England and I suspect it is).
2. Find appropriate advice for that jurisdiction
3. Write back to the party claiming money and dispute the claim
4. Ask that party for evidence - this needs to be made available in hard copy and you are not obliged to click through to unverified websites
5. If evidence is produced- seek professional help
6. If evidence is not produced within a reasonable period, write back and tell the party claiming money that you regard their claim to be invalid.

my only addition to the above is that I suspect doing 3 via a solicitor who isn't the recommended one may discourage the liquidator rapidly - if you add costs to his work you may rapidly become someone not worth chasing..

[Iliketax]

Taken from piebaps link your current steps would be

1. Confirm where the letters are coming from so which jurisdiction you are dealing with (if its not the IoM it will be the England and I suspect it is).
2. Find appropriate advice for that jurisdiction
3. Write back to the party claiming money and dispute the claim
4. Ask that party for evidence - this needs to be made available in hard copy and you are not obliged to click through to unverified websites
5. If evidence is produced- seek professional help
6. If evidence is not produced within a reasonable period, write back and tell the party claiming money that you regard their claim to be invalid.

my only addition to the above is that I suspect doing 3 via a solicitor who isn't the recommended one may discourage the liquidator rapidly - if you add costs to his work you may rapidly become someone not worth chasing..

I'd also suggest:

1. Looking at the liquidator's statements at Companies House (e.g. the 28 July 2020 says HMRC are owed £1 but no narrative and the unknown amount advanced to clients). Then keep monitoring those (you can get auto alerts but they won't be frequent).

2. Talk to the liquidator to find out what is going on (but I would not suggest using real names or your own phone number without knowing more). Try to get the liquidator to post here. Try to help them understand what actually happened in terms of the way that the scheme worked so that they wonder whether the directors acted appropriately.

3. Consider who is sending the emails asking for money back. If it is the liquidator then it needs to be taken very seriously. If it is the director or employees then tell the liquidator that.

4. Wonder why a random solicitor cold calling you in these circumstances is appropriate and whether the SRA thinks that is appropriate.

5. Wonder what the extra money that you actually got was. It'll be taxable (99.99999% certain) but it might not be a loan. If I give someone an advance of their September salary in August, it might mean that it is just taxable in August and not repayable at all (or not repayable at all if they work in September).

Remember that the liquidator has a limited budget (probably £15k to £30k here) and so won't be able to get into detailed technical discussions and detailed litigation unless the position is very clear or they are supported by a creditor.

[eek]

snip

Find a solicitor, take the contract and those emails and get them to write a letter of dispute asking for all evidence including all GDPR information relating to you...

Also edit your post as I believe you are very identifible from that and I can read it 2 ways (one of which isn't at all good for you).

Can I be very clear here don't post anything that might make you identifible online and amounts of money (even small amounts) may tell readers who you are...

[cojak]

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.