Are Umbrella loan repayment pending?

[zulucod]

Hi all

Making a post to see if anyone could help and point me the right direction regarding my use of an umbrella company. I’m not sure I can or should name them as they are still actively running and still looking for clients!

I was a locum junior doctor and was initially referred to the umbrella by my medical agency. They said all the right things and I naively took it for face value. I have now got a dose of reality. Either way I worked with them over three tax years. I recently got a letter from HMRC about settling. I contacted HMRC and detailed the amounts I think I should pay tax on and awaiting my bill for that.

My real and main concern now is what will happen now with my “loan” or “advance” with my umbrella. No particular mention of loans etc during their sales pitch. I was mislead into signing the contract after the classic reassurances about the trust looking out for me and effectively would not have to pay it back. This is looking highly unlikely and I assume once my umbrella goes under, which I suspect may be soon as their website has closed down. Is there anything I can do to clear my loan with them now? What is the likelihood that they will sell the loans on once they go under?

Anyone here have any details for solicitors who they had luck with in getting them out of this contract mess, either settling or other means.

Thanks

[DealorNoDeal]

Have you asked the umbrella company if the trustees will agree to write off the loans once you've settled with HMRC?

Getting the loans written off asap is your best bet. Some of these schemes charge a small fee for doing this.

[NotAllThere]

I was a locum junior doctor and was initially referred to the umbrella by my medical agency.

Isn't there something now that gives come back against an agency doing this? I may be misremembering.

[eek]

Isn't there something now that gives come back against an agency doing this? I may be misremembering.

Yes if HMRC were bothered

Current state of play can be found at Tackling Promoters of Tax Avoidance - Summary of responses (publishing.service.gov.uk) but it's 40 pages long and I've not even skim read it.

[NotAllThere]

Yes if HMRC were bothered

Current state of play can be found at Tackling Promoters of Tax Avoidance - Summary of responses (publishing.service.gov.uk) but it's 40 pages long and I've not even skim read it.

Well, I've read it. TL;DR SFA. Utterly useless. As to be expected.

[zulucod]

I agree this is probably my best bet, will suggest this to them. My only concern with this is that it effectively means the umbrella agrees it’s a loan which then leaves them vulnerable to HMRC.

Have you asked the umbrella company if the trustees will agree to write off the loans once you've settled with HMRC?

Getting the loans written off asap is your best bet. Some of these schemes charge a small fee for doing this.

[DealorNoDeal]

I agree this is probably my best bet, will suggest this to them. My only concern with this is that it effectively means the umbrella agrees it’s a loan which then leaves them vulnerable to HMRC.

I doubt HMRC will do anything to them. HMRC only ever seem to go after the users. Which is part of the problem. There's no real deterrent for companies flogging these dodgy schemes. If it was somehow made a criminal offence, with jail time, then that would give them pause for thought.

Imagine if the Police only fought drug crime by going after the users...

[zulucod]

You are right, it baffles me how the legislation hasn’t caught up. It’s so short sighted, HMRC could stop it at the primary source instead they go down stream which just seems so inefficient and ultimately still losing revenue.

Are all umbrellas loan likely to be recalled loans or sell of their debt books? How would one know or predict if their umbrella are likely to do the same, at this stage it is pure speculation on my part based on the IQ/felicitas situation.

I doubt HMRC will do anything to them. HMRC only ever seem to go after the users. Which is part of the problem. There's no real deterrent for companies flogging these dodgy schemes. If it was somehow made a criminal offence, with jail time, then that would give them pause for thought.

Imagine if the Police only fought drug crime by going after the users...

[DealorNoDeal]

You are right, it baffles me how the legislation hasn’t caught up. It’s so short sighted, HMRC could stop it at the primary source instead they go down stream which just seems so inefficient and ultimately still losing revenue.

Are all umbrellas loan likely to be recalled loans or sell of their debt books? How would one know or predict if their umbrella are likely to do the same, at this stage it is pure speculation on my part based on the IQ/felicitas situation.

Yes, and the even more dumb thing is that these loan schemes have been around for 20 years, and yet HMRC still aren't able to stop companies selling them.

Most loan schemes have not attempted to recall the loans or sell them. This has only happened in a handful of cases, and the schemes in question seem to involve the same companies and/or individuals.

[zulucod]

Yes, and the even more dumb thing is that these loan schemes have been around for 20 years, and yet HMRC still aren't able to stop companies selling them.

Most loan schemes have not attempted to recall the loans or sell them. This has only happened in a handful of cases, and the schemes in question seem to involve the same companies and/or individuals.

So informed my Umbrella that I have declared the loans to HMRC but umbrella still state they can't write off the loan as it might jeopardise their many 1000 other contractors/employees. Apparently they will be discussing it with the QC Mr Robert Venables. I also discussed with the umbrella the concerns about them selling off their debt book and they simply said they could do this, so hardly reassuring. It also appears the money is not in a trust yet and still with the umbrella yet they mention they are acting as part of trust law.


I am not sure why they are unable to write my loans off after my HMRC declarations so would appreciate any further advice/input on how to pursue this further.