HMRC letter for disguised remuneration from XXX that I never took

[enquiryuser]

Hi Everyone,

I have been struggling on this. Will be very grateful if anyone can advise or if anyone went through the same as me.

I received a penalty of a big sum from HMRC to pay for the loan that I never took. I am told that I took some employment loan from Procore. But I never worked for them.
However, I worked as a contractor for 11 months from my Limited company, via 2 consulting agencies [5 months with 1st, and then 6 months with the next],but I did not take the pay from those 2 consulting agencies as Loan. I received the pay as mentioned on my contract.

I paid the Taxes with my accountant accordingly and then dissolved my company later.


Has anyone received these sort of letters for loans they did not take? Anything else that I need to check, any other suggestions from anyone?


Thank you.
-

[peasant2023]

Probably cannot help much without more specifics.

But It sounds as though there was a connection to Procorre in some way and you have been paid via loan without your knowledge

It's easy to give bad advice since these schemes are so complex - You should get professional advice - ask for a (free) consultation with a tax specialist.

[Fred Bloggs]

I'm not at all sure I understand what the OP means by a consulting agency. It's possible they were both tax avoidance schemes. Because a loan wasn't called a loan in the paperwork, that doesn't necessarily mean the OP wasn't involved in a tax avoidance scheme. More information required, I think.

Of course, on the other hand HMRC might have made a mistake.

[enquiryuser]

Probably cannot help much without more specifics.

But It sounds as though there was a connection to Procorre in some way and you have been scammed I.e. paid via loan without your knowledge

It's easy to give bad advice since these scams/schemes are so complex - You should get professional advice - ask for a (free) consultation with a tax specialist.

Thank you for the reply.

The pay i received while contracting was what I agreed to in the contract by the employment business. And no where in my contract its mentioned that I am taking loan from the consulting agencies.

I am not able to reach the consulting firms, as 1 of them have been dissolved in 2021 and another one has name change.

I am reaching to few advisors for help to appeal on this to HMRC.

[cojak]

Thank you for the reply.

The pay i received while contracting was what I agreed to in the contract by the employment business. And no where in my contract its mentioned that I am taking loan from the consulting agencies.

I am not able to reach the consulting firms, as 1 of them have been dissolved in 2021 and another one has name change.

I am reaching to few advisors for help to appeal on this to HMRC.

Oh Dear.

Then I advise you to read this post and thread, and look again at your contract, this time very carefully AND get yourself a tax advisor to read through them as well…

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

PS. And consulting firms don’t just disappear or change their names overnight, but loan scheme providers do, it’s how they stay in business.

[Fred Bloggs]

Oh Dear.

Then I advise you to read this post and thread, and look again at your contract, this time very carefully AND get yourself a tax advisor to read through them as well…



PS. And consulting firms don’t just disappear or change their names overnight, but loan scheme providers do, it’s how they stay in business.

Exactly. The situation doesn't feel right to me.

[peasant2023]

The pay i received while contracting was what I agreed to in the contract by the employment business. And no where in my contract its mentioned that I am taking loan from the consulting agencies.

What year did this happen?

[enquiryuser]

Oh Dear.

Then I advise you to read this post and thread, and look again at your contract, this time very carefully AND get yourself a tax advisor to read through them as well…



PS. And consulting firms don’t just disappear or change their names overnight, but loan scheme providers do, it’s how they stay in business.

Thank you. I cross checked the contracts, I did not see any of those wordings.

And those where not umbrella companies, they were consulting/recruiting agency as a mediator with the actual employer. I received the pay of whatever was agreed/mentioned to in the employment offer.

These consulting agencies paid to my own Limited company to the agreed pay in employment contract.

[enquiryuser]

What year did this happen?

As per letter HMRC states 2018-19. I worked as contractor in 2015-16.
Since 2016, I am a permanent employee.

[WTFH]

As per letter HMRC states 2018-19. I worked as contractor in 2015-16.
Since 2016, I am a permanent employee.

OK, 2018-19 is when they rolled up all the loan charges.

So, you need to go back to 2015-16 and look at how you were paid, who the "consulting agency" were, how the money got from the end client to you, etc.