Reply to: Letter from HMRC regarding possible involvement in Tax avoidance

[jimmy899]

I will let you guys know when i get a verdict from HMRC on this subject.

[Fred Bloggs]

Actually what happened is the umbrella out of the blue sent me a P45 and wished me luck in the future (this happened in between these two HMRC letters).

Well done, wishing you luck. Hopefully the figures stack up and you're home and dry soon.

[jimmy899]

Actually what happened is the umbrella out of the blue sent me a P45 and wished me luck in the future (this happened in between these two HMRC letters).

[Fred Bloggs]

So a brief update.

Never heard back from HMRC in regards to the authenticity to the letter, despite they assuring me during the phonecall they will get in touch.

Instead i did get another letter from them asking me to provide documentation, correspondence, bank statements, payslips relating to my association with this umbrella company so that they can check if i have paid the right amount of tax. And they are asking for this for the period between april 2020 and august 2021.

Anyone had similar request from them?

Thanks for the update. It seems then that the original communication was genuine, unless the latest one is a scam too? I presume you switched brollies after you started to get concerned?

[jimmy899]

So a brief update.

Never heard back from HMRC in regards to the authenticity to the letter, despite they assuring me during the phonecall they will get in touch.

Instead i did get another letter from them asking me to provide documentation, correspondence, bank statements, payslips relating to my association with this umbrella company so that they can check if i have paid the right amount of tax. And they are asking for this for the period between april 2020 and august 2021.

Anyone had similar request from them?

[jimmy899]

Still waiting to hear back from HMRC.

[northernladuk]

OP.. How are you getting on with this?

[LondonManc]

After your edit - OP says he knew about dodgy schemes. So he sensibly chose PAYE. Where he went a bit awry, was not scratching a bit deeper below the surface veneer. Of little consequence now. OP made a sensible decision and I recommend he draws a line under this and moves on.

If they give you a full PAYE illustration which matches with an umbrella calculator, most people would, not unreasonably, assume that the company knew what they were doing, especially to make it onto an agency PSL (yeah, I know...). No mention of loans, enhanced this or that, just straightforward umbrella PAYE vehicle.

I still think HMRC are playing guilty by association and shaking the tree and see what falls out. OP should say that they were offered two options and went with the straightforward PAYE option because they didn't want any potential complications and understood it from their own visit to an umbrella calculator site.

[Fred Bloggs]

It's worth saying that I don't think any broker was involved - it was a mere sales pitch to identify which way to direct the OP.

That's indeed possible, can't rule it out. But there's no evidence to support that. If this is a reputable brolly and they are a member of a trade association and the agency too if it comes to that. The trade body needs to investigate their business practices. They won't though. One thing I have learned through life is that accreditations and the like are meaningless when it comes to safeguarding the client.

[eek]

Balance of probabilities? In my opinion, you were on the money with your option 2. OP has had a very lucky close encounter that could have bitten him very hard if he had been a bit greedier/naive than he was.

It's worth saying that I don't think any broker was involved - it was a mere sales pitch to identify which way to direct the OP.

[Fred Bloggs]

My point was that back in March beyond the "broker" there was little to say that "Turnkey" was dodgy

And while we know in detail how umbrella firms work we cannot assume other people know what to watch out for.

After your edit - OP says he knew about dodgy schemes. So he sensibly chose PAYE. Where he went a bit awry, was not scratching a bit deeper below the surface veneer. Of little consequence now. OP made a sensible decision and I recommend he draws a line under this and moves on.

[Fred Bloggs]

My point was that back in March beyond the "broker" there was little to say that "Turnkey" was dodgy

Neither of us have the slightest idea. Here, I would tend to think along the lines of most probable explanation.

An apparently successful business offering PAYE from 2018 has no incentive to go dodgy and eventually trash it's reputation. A PAYE employment business cannot afford to pay a broker (a scheme promoter) commission.

On the otherhand, a dodgy brolly offering "solutions" from 2018 has every incentive to pay brokers/promoters and to offer some PAYE payroll if someone asks for it.

Balance of probabilities? In my opinion, you were on the money with your option 2. OP has had a very lucky close encounter that could have bitten him very hard if he had been a bit greedier/naive than he was.

[eek]

My point was that back in March beyond the "broker" there was little to say that "Turnkey" was dodgy

And while we know in detail how umbrella firms work we cannot assume other people know what to watch out for.

[Fred Bloggs]

I'm not so sure - the application to strike off the second company was made at the end of April (and refused in June) while the OP was looking at this back in March.

I suspect back in March anywhere that would raise alarm bells.

I don't think I am agreeing with you here.

Subject brolly was incorporated in October 2018. OP was offered a standard PAYE employment deal or a scheme earlier this year. He wisely chose PAYE. OP mentions a "broker". A "broker" being involved in this smells to high heaven. "Brokers" promote schemes, there is no business in promoting just PAYE. OP was very lucky this promoter/broker actually offered PAYE at all.

Likely that many users routed through this "broker" will have chosen the scheme over PAYE. Hence, HMRC are thinking that everyone employed with the subject brolly is a scheme user.

Makes perfect sense to me. Again, well done to the OP who was sensible is his choice. But now, I would draw a line under this by quitting this brolly and starting with a new, fully compliant non-scheme associated brolly on Monday. With a line drawn under this and a P45 to show Hector, the OP might just be home and dry if he does as I suggest?

[eek]

It looks absolutely like option 2. The OP was offered a "solution" but wisely rejected it. At this point I would advise the OP to immediately change brollies to one with no possible connection to a possible scheme provider. If only to draw a line under this. OP seems to be pretty sensible. But it seems very careful due diligence might have rung alarm bells about subject brolly.

I'm not so sure - the application to strike off the second company was made at the end of April (and refused in June) while the OP was looking at this back in March.

I suspect back in March anywhere that would raise alarm bells.