• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.

HMRC compliance check letter regarding disguised remuneration scheme

Collapse
X
Collapse
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    HMRC compliance check letter regarding disguised remuneration scheme

    I received HMRC SA compliance check letter on 13.01.2021 for tax year ending April 2019. Stating they will start checking my return to see whether it should have included information about outstanding disguised remuneration loans.

    I have been using umbrella companies on and off for the past few years, for the tax year 2018-2019 I used one umbrella company, who used to pay part of my salary and then pass the rest of the other payment to another company to pay me the rest. They have said this is not a loan scheme and called it something else instead, and reassured me etc etc. So I filled my SA for 2018-2019 mentioning that I got paid from The umbrella company. This is what triggered HMRC to investigate.

    I am very worried and concerned because 1) they will investigate and see it was a loan scheme and I will have a HUGE bill 2) they will start checking other years and if I have to pay those back then I am literally going to be bankrupt.

    I have stopped using these schemes since October 2020 after receiving a generic letter from HMRC stating I may be using one of these schemes.

    I have a few questions:

    1. Im going to contact the umbrella company and forward this letter I received from HMRC- they will most likely fob me off after what I've read on several forums. So I will seek expert advice, I've found Bettertax.com- any good? Or does anyone have any other specialist help?

    2. what will HMRC ask for? If it's bank statements will they ask for the bank statements of the account I received the payment ONLY? Or will they ask for statements of all the bank accounts I hold? I say this because I have payments from other ltd companies I help in the past which are now dissolved, I don't want it to get messy.

    Any help will be much appreciated please.
    Last edited by min123; 1 February 2021, 18:52.

    #2
    We’ve never heard of BetterTax, but that doesn’t mean anything. Do your due diligence and check them out in Companies House.

    WTT is the company that many use here. The best thing to do about HMRC is to not to guess what they might do, just contact them (try and get professional help though).
    "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
    - Voltaire/Benjamin Franklin/Anne Frank...

    Comment


      #3
      My quick search brings up BetterTax.org who are just a firm of accountants and while they could offer some advice I do think WTT would be a better bet - you need specialist advice

      On the other points

      1) The "umbrella" will fop you off.

      2) it's worth saying that HMRC may not ask nor need anything as they already have all the information they need.

      Agencies are required to tell HMRC how much they've paid someone for the work they've done (Agency Report Regulations). So they will be telling HMRC you were paid £x,000 for the quarter.

      HMRC will therefore be looking for £x,000 (less say £300 for umbrella fees) appearing in the RTI payment submissions the "umbrella" sent when paying you. And as that isn't the case HMRC have written you a warning / check letter.
      Last edited by eek; 1 February 2021, 07:34.
      merely at clientco for the entertainment

      Comment


        #4
        Ok thank you for your responses. So I’ve checked my return for that given year they are checking- I did not work or do any work Via that umbrella for 2018/2019 so I put £0 on SA but I put the umbrella company name down for some reason as my employer even though I did not work via them in 2018/2019, but I did work via them in previous tax year and after that (so for 2019/2020 I will have to put that umbrella company name down as my employer). Do you think that triggered an investigation as the other years I filed I had some earnings with that umbrella company?

        If I say I did not earn anything via that umbrella company 2018/2019 and I can show bank statements to prove that, would that suffice? Or will they start questioning how did you live etc? That should be irrelevant though as that’s not what they’re questioning right?

        Many thanks

        Comment


          #5
          You are now getting into the point where proper advice is required to fix the issues you've made yourself. I would recommend searching for WTT, Cobham Murphy or Gilbert Tax (from the list at Suggestions for Tax advisors that can help newcomer posters (contractoruk.com)) and see what they suggest.

          Initially calls should be free...
          merely at clientco for the entertainment

          Comment


            #6
            Originally posted by min123 View Post
            Ok thank you for your responses. So I’ve checked my return for that given year they are checking- I did not work or do any work Via that umbrella for 2018/2019 so I put £0 on SA but I put the umbrella company name down for some reason as my employer even though I did not work via them in 2018/2019, but I did work via them in previous tax year and after that (so for 2019/2020 I will have to put that umbrella company name down as my employer). Do you think that triggered an investigation as the other years I filed I had some earnings with that umbrella company?

            If I say I did not earn anything via that umbrella company 2018/2019 and I can show bank statements to prove that, would that suffice? Or will they start questioning how did you live etc? That should be irrelevant though as that’s not what they’re questioning right?

            Many thanks
            You aren't going to know until you tell HMRC. You have a
            P45 if the brolly ceased to be your employer? Or if they were still your employer but you had zero income, then you got a P60 with no income reported? Tell them the truth and see what happens.
            Public Service Posting by the BBC - Bloggs Bulls**t Corp.
            Officially CUK certified - Thick as f**k.

            Comment


              #7
              So I’ve called WTT and they’ve scheduled a call with me for tomorrow. I’ve called Bettertax, they’ve essentially said I shouldn’t have had to file a SA tax return for that year as I’ve had no earnings hence why they are checking my return and so just call HMRC tell them that they will probably ask to see bank statements for that year, should I just call HMRC and see what they want?

              Comment


                #8
                Originally posted by min123 View Post
                So I’ve called WTT and they’ve scheduled a call with me for tomorrow. I’ve called Bettertax, they’ve essentially said I shouldn’t have had to file a SA tax return for that year as I’ve had no earnings hence why they are checking my return and so just call HMRC tell them that they will probably ask to see bank statements for that year, should I just call HMRC and see what they want?
                Yes.
                "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
                - Voltaire/Benjamin Franklin/Anne Frank...

                Comment


                  #9
                  So I called HMRC up and the guy over the phone sounded like he was junior. He told me they wanted information of 2017/2018 but I said it states 208/2019 return in the letter, he said 'we can go back up to 2010, but we are just asking for 2017/2018 tax year' - I'm confused. I asked what do I need to send, he said you should've received a schedule of what documents to send- I didn't receive that! So I asked what is it you require, he said not bank statements as we don't know how many bank statements you have, so I said ok what else, he said some documents such as payslips so we can check it against your tax return.

                  Im all a bit confused with this guy- the letter clearly says 2018/2019, but he was pushing for 2017/208. So what should I do, shall I follow the instructions of the letter and send payslips of 2018/2019, or should I send 2017/2018 as well as 2018/209?

                  Comment


                    #10
                    HMRC may be fishing about 2017/18 to see if you should have paid the 2019 loan charge (LC). (If you had received loans prior to 5/4/19, you would have been required to declare them on your 2018/19 tax return and pay the LC.)

                    The Loan Charge - an explainer | Chartered Institute of Taxation

                    You say Charteris claim the payments weren't loans but it would be interesting to know exactly what they were.

                    Was the other company, that Charteris routed the money through, based in the UK or offshore like Isle of Man?
                    Last edited by DealorNoDeal; 1 February 2021, 13:43.
                    Scoots still says that Apr 2020 didn't mark the start of a new stock bull market.

                    Comment

                    Working...
                    X