Reply to: Ecron Management Services

[cojak]

And the only reason that these providers are encouraging you to use your own Ltd within these ‘solutions’?

To hide the fact from agencies that you’re using a dodgy scheme.

Agencies will refuse to use you or them if they see this kind of thing at the beginning of a contract.

In fact it will make matters worse for you as HMRC will expect you to pay Employer’s NI on top of the tax and Employee’s NI.

Thread closed.

[cojak]

That only applies to loans as it is called the “LOAN CHARGE but what they provide isn’t a loan, it’s an annuity with no dept. The consultants said that our pensions are technically called annuities too so it’s like paying into your pension which is covered by a “bear trust” unlike the offshore loan stuff affected by next year and outlawed years back. You can’t call every solution a loan if that’s not what they’re offering.

What are you paying in tax on your income with this ‘solution’? If it isn’t at least 25% to HMRC (not these providers) then you WILL get caught and HMRC will charge you the maximum they can get away with - 40% as a minimum, all in one go!

Really, if you are that gullible, go ahead but DO NOT try to convince us that it’s legit, just to salve your own conscience.

I no longer point and laugh at those in the HMRC Scheme Enquiries forum, but the suckers still thinking it’s a good idea are another matter.

[Alan @ BroomeAffinity]

Regardless of whether it’s termed a loan or not, if you’re getting an income for working/providing a service and not paying tax on it by whatever convoluted means, you’re in HMRC’s crosshairs. And you’re not paying any tax btw. The deductions of ~20% go straight into the pockets of the provider.

[McNezzie]

No apology needed.

But read both of my links - any company promising >80% take home will be putting you into HMRC's cross-hairs come April 2019...

That only applies to loans as it is called the “LOAN CHARGE but what they provide isn’t a loan, it’s an annuity with no dept. The consultants said that our pensions are technically called annuities too so it’s like paying into your pension which is covered by a “bear trust” unlike the offshore loan stuff affected by next year and outlawed years back. You can’t call every solution a loan if that’s not what they’re offering.

[cojak]

Apologies, I misunderstood.

I was just asking about Ecron and whether what they offer is legit or just another scam that would likely get me into a lot of trouble with the crooks at HMRC.

I should have put this as a separate comment and not quoted you.

No apology needed.

But read both of my links - any company promising >80% take home will be putting you into HMRC's cross-hairs come April 2019...

[meridian]

Ecron Management Services

So Ecron contacted me and said that the potential IR35 changes for next year won't make any difference, which I didn't really understand. Anyone got any ideas???

Leaving any HMRC implications aside for a moment - the majority of your company’s income will no longer be your income, it will be Ecron’s. They will ‘loan’ you ‘their’ money, and they can decide to recall that loan at any time, in full, regardless of whether you’ve spent that money on food, rent/mortgage, etc.

Is that seriously the way that you want to run your business?

[LordEntropy]

My comment had absolutely NOTHING to do with IR35, it had EVERYTHING to do with the 2019 Loan Charge.

What is the 2019 Loan Charge?

Apologies, I misunderstood.

I was just asking about Ecron and whether what they offer is legit or just another scam that would likely get me into a lot of trouble with the crooks at HMRC.

I should have put this as a separate comment and not quoted you.

[cojak]

So Ecron contacted me and said that the potential IR35 changes for next year won't make any difference, which I didn't really understand. Anyone got any ideas???

My comment had absolutely NOTHING to do with IR35, it had EVERYTHING to do with the 2019 Loan Charge.

What is the 2019 Loan Charge?

[LordEntropy]

Until April 2019...

So Ecron contacted me and said that the potential IR35 changes for next year won't make any difference, which I didn't really understand. Anyone got any ideas???

[cojak]

We all read HMRC’s spotlights and instantly feel terrified about using any solution. However, we all forget that HMRC aren’t really the government. Yes they make sure we pay the right taxes but when it comes down to taking down solutions they have to ask the real government for their opinion and then their permission!

HMRC’s spotlights that they post on their website (e.g. Spotlight 35 and 42) are based on HMRC’s opinion on the solution but it doesn’t actually explain why the solution doesn’t work. They post these spotlights to scare people so they won’t use them. The only solutions that ave been taken down are LOANS after 30 years of them running. When HMRC challenged annuities, the annuities won as their was no proof of any indebtedness to be repaid. These solutions are completely legal to use and if there is no indebtedness then what reason do HMRC have to investigate us?

I’m sure not many people are aware as HMRC try to keep this on the down low.. but HMRC are under investigation by the EU court due to the APN’s they sent out in 2016. The Financial Times explained how over 2,000 APN’s were revoked due to HMRC wanting to investigate people's LTD’s unnecessarily; the EU Court saw this as breaking peoples basic human rights and are still under investigation.

Can we trust HMRC? The only illegal solutions to use are EBT’s which HMRC brought down in 2014/2015. CBT’s (most loans, annuities and option payments) are completely legal to use and something HMRC are struggling to take down. They do it through posting on social media and creating these bogus spotlights. They even send phishing letters to scare you into admiting you used a solution and once you do that they make you pay money to them.

My brother is a contractor too and we both use a solution called Ecron Management, it is completely legal to use and we trust the method fully. In the 3 years I have been using it, we haven’t received any issues from HMRC the only time I did was when I used Infinity (a loan) and received an APN, the company even changed their name to Choice and offered me no support!

We really need to educate ourselves on these different types of solutions and not let ourselves be brainwashed into the OPINION of a large Limited Company (I.e. HMRC) who do not have as much control over legislation as we like to believe.

Until April 2019...

[McNezzie]

HMRC are a sham

We all read HMRC’s spotlights and instantly feel terrified about using any solution. However, we all forget that HMRC aren’t really the government. Yes they make sure we pay the right taxes but when it comes down to taking down solutions they have to ask the real government for their opinion and then their permission!

HMRC’s spotlights that they post on their website (e.g. Spotlight 35 and 42) are based on HMRC’s opinion on the solution but it doesn’t actually explain why the solution doesn’t work. They post these spotlights to scare people so they won’t use them. The only solutions that ave been taken down are LOANS after 30 years of them running. When HMRC challenged annuities, the annuities won as their was no proof of any indebtedness to be repaid. These solutions are completely legal to use and if there is no indebtedness then what reason do HMRC have to investigate us?

I’m sure not many people are aware as HMRC try to keep this on the down low.. but HMRC are under investigation by the EU court due to the APN’s they sent out in 2016. The Financial Times explained how over 2,000 APN’s were revoked due to HMRC wanting to investigate people's LTD’s unnecessarily; the EU Court saw this as breaking peoples basic human rights and are still under investigation.

Can we trust HMRC? The only illegal solutions to use are EBT’s which HMRC brought down in 2014/2015. CBT’s (most loans, annuities and option payments) are completely legal to use and something HMRC are struggling to take down. They do it through posting on social media and creating these bogus spotlights. They even send phishing letters to scare you into admiting you used a solution and once you do that they make you pay money to them.

My brother is a contractor too and we both use a solution called Ecron Management, it is completely legal to use and we trust the method fully. In the 3 years I have been using it, we haven’t received any issues from HMRC the only time I did was when I used Infinity (a loan) and received an APN, the company even changed their name to Choice and offered me no support!

We really need to educate ourselves on these different types of solutions and not let ourselves be brainwashed into the OPINION of a large Limited Company (I.e. HMRC) who do not have as much control over legislation as we like to believe.

[shedges76]

That is exactly the type of thing that the 100% penalty regime in the General Anti-Abuse Rules was designed to stop. But it's also stopped by the disguised remuneration legislation. I'll let you ask your accountant about that. But if you do, tell her that you are "A", your limited company is "B", Ecron Management is "P" and that the cash they pay you is a relevant step because it is to you (or it is to the limited then to someone linked to you (within the meaning of s554Z1)). Maybe ask them to confirm that you will have to pay employment income tax on the cash you (or your Limited) receive. This tax is collected by your limited company through the PAYE system (with employee's and employer's NIC due). If you don't promptly reimburse them then there is further tax and NIC on the PAYE that you did not reimburse. Don't forget to mention DOTAS and the employment income hallmark to your accountant when you ask about the 100% GAAR penalties. As contrived and abusive are written all over this then you might become famous by HMRC asking the GAAR Advisory Panel to give an opinion. Add together the penalties for RTI failure, interest on late tax and so on, you will find that your effective tax rate could be close to 200%. And your MP won't be sympathetic either.

So was that a yes or a no iliketax? Could you be a little more definitive?

[Iliketax]

Option Payment

Option payment can be summarised as a person paying capital to another person in exchange for income based upon that original capital sum from the other party in the future.

ECM LTD will pay a capital sum to the freelancer under the option payment agreement. In return, the Contractor promises to pay an annual income to back ECM LTD at some point in the future.

This income does not become payable until Ecron Management decides it wants to trigger repayment – so payment of the income is deferred.

That is exactly the type of thing that the 100% penalty regime in the General Anti-Abuse Rules was designed to stop. But it's also stopped by the disguised remuneration legislation. I'll let you ask your accountant about that. But if you do, tell her that you are "A", your limited company is "B", Ecron Management is "P" and that the cash they pay you is a relevant step because it is to you (or it is to the limited then to someone linked to you (within the meaning of s554Z1)). Maybe ask them to confirm that you will have to pay employment income tax on the cash you (or your Limited) receive. This tax is collected by your limited company through the PAYE system (with employee's and employer's NIC due). If you don't promptly reimburse them then there is further tax and NIC on the PAYE that you did not reimburse. Don't forget to mention DOTAS and the employment income hallmark to your accountant when you ask about the 100% GAAR penalties. As contrived and abusive are written all over this then you might become famous by HMRC asking the GAAR Advisory Panel to give an opinion. Add together the penalties for RTI failure, interest on late tax and so on, you will find that your effective tax rate could be close to 200%. And your MP won't be sympathetic either.

[Darren at Fox-Bartfield]

EBT

[stek]

Welll... if loads of people were using them with no problems, I'd consider it more seriously. Clearly I'll be avoiding this based on initial feedback Thanks malvolio

Loads of people were using EBT-based schemes without any problems until HMRC caught on...