Dodgy umbrella. Advice on sorting out affairs

[Catscope]

Hello folks.

I want to start by apologising, if this is in the wrong section or has been answered 100 times. I have spent hours on this forum and if I am being honest. I’ve got lost in jargon 100 times and am still unsure what to do.

I spent from August to November of this tax year getting paid through an umbrella company where I was getting a small amount paye and the remainder as an option agreement (loan). I received a letter from HMRC rather generic, stopped immediately and changed to an umbrella which puts all my income through the books so to say.

I have spoke to an accountant who has taken me on. However I seem to know more than him on the issue.

His advice to me was to declare the income on tax return and pay the tax

From this forum I don’t think it’s that simple.... I have asked the umbrella to write off the loan. However they state there’s a clause that if they ask for the money back early they have to pay £1000 and aren’t willing to do so.

Does anyone have any advice going forward? Sack the accountant. Or follow his advice?

Any help appreciated

Once again apologies if I have broken any forum rules.

[cojak]

Oh Dear.

Well, we have a sticky for just this situation... What to do if you are using a dodgy umbrella

[cojak]

All though I'm not sure what to do regarding the Umbrella side of things.

If anyone wants to post about that I'll copy it over to the linked post above.

[Fred Bloggs]

Wow! With all the publicity about dodgy brollies and loans in lieu of salary, there's still, people signing up? Well done to the OP for realising early and getting out before it ruined their life. What an appalling situation this still appears to be.

[Catscope]

Completely nieve, believed everything the recruiter said. Disaster I know.

Currently anyone I talk too seems to get confused by what’s going on. I am at the moment going to settle things up with HMRC. Ask a solicitor to check the contract for the option agreement (loan) and see if it’s worth it’s weight in paper.

I know of 4 other people I work with in the same or much worse situation and I haven’t got the heart to tell them. The umbrella and agency’s just say ignore the letters from HMRC and they are taking them at their word.

If I hadn’t discovered this forum. I would be none the wiser.

[eek]

Completely nieve, believed everything the recruiter said. Disaster I know.

Currently anyone I talk too seems to get confused by what’s going on. I am at the moment going to settle things up with HMRC. Ask a solicitor to check the contract for the option agreement (loan) and see if it’s worth it’s weight in paper.

I know of 4 other people I work with in the same or much worse situation and I haven’t got the heart to tell them. The umbrella and agency’s just say ignore the letters from HMRC and they are taking them at their word.

If I hadn’t discovered this forum. I would be none the wiser.

If an agency is involved make sure HMRC are fully aware of the fact as they should be able to pass the issue back to the directors of the agency.

It won't solve all your problems but it will make you feel better known that the directors will be suffering a whole world of pain.

[Catscope]

Do yous feel I should go on the offensive and try hard to get the loan written off. Or should I bide my time and wait and see what happens.

(HMRC are being dealt with separately if I’ve learnt anything from eek and the others, it’s that these are two very separate issues)

[cojak]

Do yous feel I should go on the offensive and try hard to get the loan written off. Or should I bide my time and wait and see what happens.

(HMRC are being dealt with separately if I’ve learnt anything from eek and the others, it’s that these are two very separate issues)

Do not bide your time - it will only get worse from here (and will only cost you more money).

Try to get the loan written off, speak to a reputable tax advisor. It may cost you a bit but it will be worth it for peace of mind.

And dob in the agency to the HMRC.

[Fred Bloggs]

Are there any regulatory avenues that the individual can follow up on with respect to the agency in parallel with talking to HMRC? I am very surprised indeed that an otherwise reputable (?) agency could get away with directing people into a tax avoidance scheme these days. The agency will be getting a kick back, that must mean something can be followed up on somewhere? Agency is unlikely to be completely unregulated? It would be a tragedy if the agency can just carry on recruiting more folks into tax avoidance schemes that will fail whilst lining their own pockets. Good luck.

[Fred Bloggs]

Do yous feel I should go on the offensive and try hard to get the loan written off. Or should I bide my time and wait and see what happens.

(HMRC are being dealt with separately if I’ve learnt anything from eek and the others, it’s that these are two very separate issues)

1st priority, continue to talk to HMRC. 2nd priority is to get some professional advice, but be careful. The world of tax advisers is full of current and ex-scam artists. Luckily it's a pretty small loan exposure, I'm sure it can be sorted out but it'll cost you, for certain.