SP Management - HMRC claims

[GregRickshaw]

I’m not sure that this has anything to do with MSC challenges, this seems like dodgy providers and pure tax avoidance to me.

I’m with DONR, it smells like IoM to me too.

I meant the poster Errol Flynn they don't seem to be with SP they don't mention SP they only mention the accountants?

The OP I agree has double trouble

[cojak]

We can’t tell you to settle or not settle - that is something you will have to decide on your own.

Regarding other advice, the best I can do is to give you advice from a poster that has the answers to your question:

First, you have not had a Reg 80. A Reg 80 is issued to an employer. It is provoked by HMRC thinking that the employer had made payments of remuneration to employees which have not been subjected to PAYE.

It has no connection with IR35. The rules in IR35 are to determine whether you are to be taxed as an employee or not.

My guess is that you used the AML/SmartPay arrangement in which your own company (PSC) invoiced an end client, received the money, passed on most of it to SmartPay and then received from Knox House Trust a sum of money, paid to you personally.

If so, HMRC's view is that the payment of money from your PSC to SmartPay was in reality a payment of remuneration to you. That should have been subjected to tax and was not. Hence HMRC is trying to make that good by issuing the assessment.

You can (and should) appeal within 30 days. If you do that and ask for the tax to be postponed then your PSC will need to establish that either the payments were NOT remuneration (to you) or that the money was remuneration was was paid to you by Smartpay or an agency or perhaps even your end client. Most likely this is done by discussing matters with HMRC for perhaps 12/18 months and then litigating.

Failure to do either of the above will result in your PSC being liable for the assessment. If the PSC is unable to pay, chances are HMRC will seek to transfer the liability to you. Whether that is possible or not can depend on a number of factors.

Amending your SATR is unnecessary and likely to be ineffective.

Go and get some advice from somebody with some experience and who is not biased, i.e connected with AML/SmartPay who may well be conflicted.

The only other advice we can give is that you should find a tax adviser to help with your problem. Webberg doesn’t post here anymore but you can find him at WTT, they are indeed tax advisors.

[DealorNoDeal]

All please could someone answer the questions I have in my thread.

I honestly feel there are so many contractors who are between a rock and hard place and have nowhere to turn, and can't talk to anyone about it, as no one really understands these schemes!

SP Management was based in Isle of Man at one time, not sure where they are now.

Also the letter from HMRC is dated 25th March 2022, so when do I have until to respond / appeal?

It should say on the letter but it's normally 30 days, so you need to act fast.

If you're not sure what to do, then appeal to give yourself more time. A generic appeal letter may be ok, if you don't want to pay Carnegie Knox.

--------------------------------

Your ref: xxxxxxx

Dear Sir or Madam,

Regarding your letter of dd/mm/yy, I wish to appeal and request postponement of payment.

--------------------------------

The scheme you used almost certainly didn't work. The chances of any appeal being successful are virtually nil.

However, lodging an appeal will buy you time. Eventually you may have to settle but that could be a couple of years or more away.

[cojak]

It should say on the letter but it's normally 30 days, so you need to act fast.

If you're not sure what to do, then appeal to give yourself more time. A generic appeal letter may be ok, if you don't want to pay Carnegie Knox.

--------------------------------

Your ref: xxxxxxx

Dear Sir or Madam,

Regarding your letter of dd/mm/yy, I wish to appeal and request postponement of payment.

--------------------------------

The scheme you used almost certainly didn't work. The chances of any appeal being successful are virtually nil.

However, lodging an appeal will buy you time. Eventually you may have to settle but that could be a couple of years or more away.

And for the avoidance of doubt…


Write it out this morning, go to the Post Office and send it by express post - it needs to get to HMRC by Monday.

[WTFH]

All please could someone answer the questions I have in my thread.

I honestly feel there are so many contractors who are between a rock and hard place and have nowhere to turn, and can't talk to anyone about it, as no one really understands these schemes!

SP Management was based in Isle of Man at one time, not sure where they are now.

Also the letter from HMRC is dated 25th March 2022, so when do I have until to respond / appeal?

Questions I have are:

1) Should I appeal or settle (even though I know HMRCs estimate is more than what I owe).

2) If I appeal would this trigger another issue as in an APN or some other enquiry, so does this mean all an enquiry does is delay the payment due, but I will still have to pay the due taxes and by appealing you just end up spending more money (potentially with Carnegie Knox's settlement department which is called "PTS Settlements" that would charge a 4 figure sum to start the process to carry on appealing with HMRC.

3) I am being told that when one calls HMRC they ask probing questions into income and assets to get information as to ones financial situation to coordinate how much
pressure to put on the payee to get them to pay back the outstanding tax.

4) Would you say it's better to call HMRC or email them and do all correspondence on email?

5) Is this (Regulation 80 / Section 8) anything to do with IR35, I don't have IR35 Insurance, Should one be taking out IR35 insurance for the rest of their life (even if the LTD company is closed down), as it looks like HMRC can come knocking on our doors at any time!

Errol, follow DealorNoDeal and Cojak's advice above. After writing and posting the letter, come back to let us know you've done that.
And then I think it would be useful to know exactly what you were involved in.

I've got a load of questions/comments, but until you send that letter, I'm not going to derail you by posting them.

[eek]

And for the avoidance of doubt…


Write it out this morning, go to the Post Office and send it by express post - it needs to get to HMRC by Monday.

+1 - like drop anything and everything you were planning to do until that letter is in the post.

[ErrolFlynn]

Thank you all for this help so far. I am sending the appeal letter today as Special Delivery so it will be with them (HMRC) by 1pm tomorrow.

for next steps please could someone tell me what WTT / Webberg is and how I can / should contact them (as this was mentioned by @cojak)?

[WTFH]

Thank you all for this help so far. I am sending the appeal letter today as Special Delivery so it will be with them (HMRC) by 1pm tomorrow.

for next steps please could someone tell me what WTT / Webberg is and how I can / should contact them (as this was mentioned by @cojak)?

https://wttgroup.co.uk

[WTFH]

And now a history lesson...

SP Management were last seen in Malta, but in 2015, it is more likely that you signed up to SmartPay, SmartPay Limited or SmartPay Management Limited (SPML). All UK based at the time. Their parent company was Aston Management Limited (AML) who were based at Knox House in the Isle of Man (along with many of Douglas Barrowman and Timothy Blackburn's schemes businesses including Knox House Trust, Knox House Nominees, etc).
When HMRC went on their big clampdown in 2016, the various SmartPay companies all disappeared or relocated to Malta.
AML set up a business, AML (Tax) IOM, which was (possibly) their attempt at fighting the loan charge.
When it was clear that they were on a hiding to nothing, then the next one was to set up PTS (which may be the company behind Vanquish or the other way around, my memory is vague on that one). The idea back then was that you paid 10% of the amount to them, they took over the loan and wrote it off, while making a new loan, but not a loan, with you. (again, I can't remember the exact details of how the new scheme within a scheme worked, but it was something like that). I believe PTS have moved on from there a little and are now a company that send out letters.

We now have two of the players in the game: Timothy Blackburn ( https://offshoreleaks.icij.org/nodes/56063174 ) and Douglas Barrowman ( https://offshoreleaks.icij.org/nodes/13000062 ). I could be wrong, but Douglas has a thing for fast cars, and I think his businesses tended to have "AM" in the title, or Aston, because he liked Aston Martins. As we all know, he's married to Baroness Michelle Mone OBE.
In the very early days of the Knox group, it was known as Clay Knox, that Clay being Daniel Clay. The Knox part of it seemed to be a choice of Timothy Clive Eve ( https://offshoreleaks.icij.org/nodes/56013905 ), as several of his businesses have Knox in the title. (can you see where this is going yet?). The other name to throw into the mix is Arthur John Lancaster ( https://offshoreleaks.icij.org/nodes/56049692 ). Look on CoHo and you'll find these names crop up in many different companies - rarely all of them in one company, but frequently two or three, and the person with significant control might not be one of the directors.

Timothy Clive Eve is a chartered accountant.
Carnegie Knox, and all the variations on that name, were known as Pipeline Accounts for a while. This branding was to appeal to the oil & gas sector, since they were based in Aberdeen. They are a legitimate accountancy business, but are associated with the various firms above, and recommended by them. If you were running your own Ltd, you could use them as accountants and they would do the various accountancy things, submitting returns, etc. If you were working through one of the other companies, then exactly what they were doing is debatable, and may depend on who was paying them and what the instructions were.

Why have I said all this? Well, the comment in Errol's post was that Carnegie Knox had not paid his income tax. Carnegie Knox are accountants and would not have paid his personal income tax & NIC. CK might have filled out his tax return, but it would have been up to him or the umbrella company he was working through to pay the income tax & NIC. I am not here to defend Carnegie Knox. To better understand the predicament Errol is in, we'd need to know the exact names of the companies he was involved in and what sort of payment scheme had he signed up to - was it loans through trusts, or similar? Was SPM acting as an umbrella? Approx what return did he get on his monthly earnings?

And one final thing: if you're working through an organisation that contains any of the names mentioned in this post, may I suggest you carefully consider your situation.

Edit: and to aid your due diligence - look up the name on the opencorporates site: https://opencorporates.com/corporate...of%20Companies

[DealorNoDeal]

In other words, dodgy as hell.

I don't suppose Carnegie Knox are telling people that they are paying them £xxx to appeal a case which is almost certainly hopeless.