Another Consulting Overseas Victim?

[NotAllThere]

This from a guy who makes the error of judgement of going back to permiedom, and then complains about his working conditions.

<<canned laugher>>

[handyandy]

Actinium Management Ltd scheme anyone?

Just found this forum and am reading with interest - however, after trawling back through the thread a bit I'm confused if the discussion relates just to the Sandiford (?) scheme that CO used to run or if it relates to AML too.

I was never in the first one but was an AML member/employee for 2.5 years before the MSC market went to pieces in February 2007 (at which point I got set up by CO/AML with my own Ltd. co which they quickly had to hand over to me completely.

I've received HMRC letters giving me notice that they are inquiring into my tax affairs for 2 tax years that I was under AML and in both cases they have said it relates to earnings and dividends relating to my empllyment with Actinium. The letter says they don;t intend to ask me any specific questions at this point.

Is anyone else in this situation? HMRC will not elaborate further with me directly. I have managed to contact a former director of Actinium who says they have picked a handfull of individuals under that sceme and are 'drilling down' into their individual returns and into the AML scheme - he said Actinium are actively involved in suplying HMRC with details they request and have their tax council on board too.

Their position is that they have councils advice that the sceme was legal and legit - but he did ssay that HMRC's stated intention is to prosecute.

Anyone else in the same situation (or is anyone actually one of the poor sods who have been picked on for personal attention)? My own position is that AML committed that they'd received councils advice that it was legit and I would ultimately go after them (or their insurer) for reimbursement if that advice was wrong. I think the problem is that they may end up doing a deal with HMRC where lots of employees take the hit and AML disapere from the face of the earth with HMRC blessing.

Anyone who is specifically affected by this I'd be interested in hooking up so we can share info.

Handy.

[DonkeyRhubarb]

Re: Actinium Management Ltd scheme anyone?

I was in the AML scheme for a couple of years too, and have received the same letters. Prior to AML, I was with MTM/Montpelier, and am under investigation for this scheme as well. In fact, there aren't many years in the past 7 or 8 where I'm not under the screws

Unlike Montpelier, the fact that AML are no longer trading is a concern since I don't see that there's a huge incentive for them to fight this as vigorously. On the other hand, I was under the impression that the scheme was covered under the MSC legislation, so I don't see what grounds HMRC have for attacking it. Perhaps they are going after other MSCs as well?

The problem with these investigations is that they can drag on for years. The Montpelier one has been going on for 5 years now without a resolution. If the Revenue ultimately wins then you face interest penalties (currently 8.5%) on top of the back tax.

Presumably, if the Revenue succeeded in proving that the dividend payments should have been treated as salary, then they could go after AML for unpaid Employers NI, and I guess the directors could be held liable for this.

PM me if you want to continue this discussion offline.

[DonkeyRhubarb]

Re: Actinium Management Ltd scheme anyone?

PS.

One thing which is different about the AML investigation, than the Montpelier one, is that the letters do not mention interest penalties or invite us to make any payments on account to mitigate them. You will have to take my word on this but the letters are also a lot friendlier and so far they have not accused the employees of doing anything wrong.

I could be mistaken but it sounds to me like they are targetting the Company in the first instance. That's not to say that they won't come after us in the end but at least there is a chance that they may waive any interest penalties.

[Likely]

PS.

One thing which is different about the AML investigation, than the Montpelier one, is that the letters do not mention interest penalties or invite us to make any payments on account to mitigate them. You will have to take my word on this but the letters are also a lot friendlier and so far they have not accused the employees of doing anything wrong.

I could be mistaken but it sounds to me like they are targetting the Company in the first instance. That's not to say that they won't come after us in the end but at least there is a chance that they may waive any interest penalties.

With all the buzz lately about Tax Avoidance Schemes , some must become scapegoats eventually. I am considering going back LTD , that is soon after I've spent a few months with a scheme provider.

[handyandy]

Good points - my view is that they may be going after AML for avoiding NI contribs (in which case they could come after us for Employees contribs - but the employees are at least capped, emprs are not).

I think the killer would be if they deem the complex international share/company ownership structure to be ilegal and start claiming that the tax credit attached to divis is not valid - that would potentially hit us with additional basic rate tax on the divis.

Not sure how to PM you?

[DonkeyRhubarb]

If you click on my name in the thread, you should be able to send me an email.

I tried with yours but that option was not available, and I'm guessing it's because you have only just registered.

[ChimpMaster]

The tax you might owe must be enormous. Let's take an example where a contractor brings in revenue of 100k each year. Approximate calculations are:-

================================================== ====
Gross = 100,000
PAYE = 30,500
Employee NI = 4,500

i.e. HMRC will have expected some £35,000 in taxation from you each year.
================================================== ====

Now, assuming MTM/AML/etc pay you a nominal salary of 25k and the rest as a loan:

Salary = 25,000
PAYE = 4,000
Employee NI = 2,000

So you have paid £6,000 in taxation each year. You have probably paid no tax for the loan.
================================================== ====

In this example you could owe £30,000 in taxes for each year ... £150,000 for 5 years. Plus interest. And can they add 100% to the value of the outstanding tax?

I think you'd be better off leaving the country and throwing away your passport...

[DonkeyRhubarb]

The AML scheme was nowhere near that aggressive, with a similar retained income to being outside ir35. In hindsight, the MTM scheme was probably taking the p*ss somewhat.

They will only add 100% to your tax bill in the case of evasion. At no point have they accused anyone of doing anything illegal, and they are "only" talking about interest penalties.

The worst case scenario is that you have to pay back the tax which you would have paid in the first place + interest. Of course, their interest rate is a couple of points higher than you could have got in a savings account but not the end of the world.

The real problem arises where people (and I know a few) have already spent the money.

Fortunately (or unfortunately), the amount of money I've got riding on this is not enough to justify really drastic measures, otherwise I'd be doing exactly what you suggested and talking to a travel agent right now

[handyandy]

Yes the AML scheme was nothing like your assuming TazMan - it was more like the kind of return you got through a Ltd. Co. outside IR35 (and all the contracts with the agency/client where checked for IR35 status and deemed outside).

Probably begs the question why go with AML rather than Ltd Co - good question all I can say is that it seemed a lot less hassle and the MSC model was very popular back then and seeme dto have more certainty around it.

As I said before I think the revenue have a potential claim for NIC but not much else - the frustration is that they open an enquiry then decide not to ask you for any information directly as they are getting all the relevant details for a handfull of scheme members then, if they feel they have a case, will try and apply their 'assessment' to everyone.