Reply to: Penalties

[GregRickshaw]

Just get professional help, the people who understand this are not on this forum. We are sympathetic and can relate our own stories but ultimately we are clueless.
No one understands what's going on or what might go on at a tribunal so just seek help.

[Nava39]

Thanks for your reply, my loans relate to tax years 18/19, 19/20 & 20/21. I assumed at the time they were legal like I was advised and now i'm asked to do a SA for those tax years. Also i never received the letters as I was out of country so also have a late fine on it before anything else. Trying to find my best course of action. I see people on here have had similar issues with the same company, Pembroke umbrella, so wanted to see if anyone had any advice or guidance. I need to submit 3 years of self assessments as it stands.........

I'm no expert, and you may seek some professional help.Be careful how much you spend on advice not throwing good money after bad.

looks like you have been caught out and not much you can do. HMRC have wind of your membership of the scheme and looks like you are firmly on their radar. You declare the amounts and have to pay up. The best you hope for is negotiate Time to Pay. Just be mindful that with higher interest rates the amounts could mount up from here.

Hopefully others with more knowledge can chip in their thoughts.

[mikeappleyard4]

Thanks for your reply, my loans relate to tax years 18/19, 19/20 & 20/21. I assumed at the time they were legal like I was advised and now i'm asked to do a SA for those tax years. Also i never received the letters as I was out of country so also have a late fine on it before anything else. Trying to find my best course of action. I see people on here have had similar issues with the same company, Pembroke umbrella, so wanted to see if anyone had any advice or guidance. I need to submit 3 years of self assessments as it stands.
Also do we need to declare these loans as income at all?
Wanted to see had people paid much extra tax or penalties on these loans, as it stands this will ruin me financially so naturally i'm really starting to panic.

[Nava39]

Hi,

I'm a bit late to this thread, but has anyone got any update on whether they paid tax on their loans in the end? I need to fill out a self assessment for the time I was with Pembroke and am unsure how to proceed. Thanks.

Maybe you posted on the wrong thread. But anyway.....
- What year do your loans relate to? And
- Do you have any HMRC open enquiries for those years?

[mikeappleyard4]

Hi,

I'm a bit late to this thread, but has anyone got any update on whether they paid tax on their loans in the end? I need to fill out a self assessment for the time I was with Pembroke and am unsure how to proceed. Thanks.

[AnthonyB]

Although, when you say that money "isn't actually yours", no permie ever receives the tax up front, it gets taken off them before they are paid along with NI but that money certainly IS theres. It was my expectation that was my tax bill, I have multiple emails where I was reassured Pembroke were paying all of my required tax, I asked multiple times and had answers from multiple individuals to that effect. I understand that may well be as useful as a chocolate teapot in the eyes of HMRC but I'll wait for that decision before I go spanking a ton of money on a bill that hasn't arrived. I certainly get your PoV I just don't want to pre-emptively pay and find out I didn't need to. At this stage I'm just curious to know if penalties have been levied around loan schemes and what for.

[AnthonyB]

So it sounds like we are of the same mindset, I don't know what HMRC are going to do/ask for so I don't want to go handing over full tax and NI on the whole shebang if I find out later they were only planning to tax the loan amount and/or agree to some relief given the promises made that our tax had been paid and the widely held belief that it doesn't come under the loan charge. It's my view that if they spent this much time and effort with a major company or looked a bit more at the CBILs fraud they'd find a lot more cash rather than chasing people like me for low 5-figures. Maybe I'm being too optimistic but equally, I don't fancy drawing money out of my ISA to pay a bill that may never have come. On advice I have declared it all and more, I have been transparent, it was my first and last foray in to contracting so the whole umbrella/loan stuff was new to me. Yes, it looked properly dodgy, just like every major UK company who are 'creative' with their tax bills...

[eek]

To be blunt it's Pembroke and I don't think anyone has a clue what is going to happen and what HMRC will do including both the liquidator (Ian doesn't bite btw so you could ask him to find out what he thinks) or HMRC themselves.

But don't get struck up on the 20% thing because that isn't money you received so isn't actually yours. If HMRC come calling and are generous they will tax the 80% of "your income" that you received, if HMRC just look at agency reporting they will tax all 100%.

And because its Pembroke it's perfectly possible (albeit very unlikely) that HMRC won't come calling - to say it's a mess would be an understatement..

Note I use brackets around your income because it isn't yours - that was the agency assignment fee paid to Pembrokes. You then received the sum Pembrokes paid you.

[AnthonyB]

I'm not sure whether it's the right thing to do or not to name tax advisors here. All my loans were disclosed but not until specifically requested as I don't normally declare loans to HMRC. The scheme was recommended by a broker. It was my tax advisors advice to declare everything and let them tell you what they think needs to happen next e.g. will they go after my employer for not paying the tax which they told me they had done, will they give me any 'credit' given that 20% of my salary was taken and I was told it was going towards my tax? It also doesn't fall under the Loan Charge (I've been told this by multiple advisors including WTT) as there was no third party involved. So there's lots to consider so unsurprisingly I don't really want to have to pay another 35%+ of my income on a year where I have already paid 20%.

The question still remains, has anyone seen penalties levied against people who worked with these relatively similar loan charge type schemes or are they just being asked to pay again for tax direct to HMRC?

[Fred Bloggs]

I would think the application of penalties would depend on whether you can demonstrate to HMRC that you were neither dishonest nor careless in reporting your income and that you took reasonable steps to seek professional advice in managing your tax affairs. Was the scheme recommended by an accountant? Have you got any of the promotional material which may have made false claims of professional approval or oversight? etc

All good points and it's likely an uphill battle on all of them. I think it would help understand if the OP names the tax advisors. Experience here hasn't been universally positive of them.

[Fred Bloggs]

I was reassured a number of times in writing that I had paid all of my tax. I have not paid tax on those loans in addition to the 20% I have already paid Pembroke, on the advice of my tax advisor. The question remains, does anyone know of penalties being levied and what the criteria was?

It might help those here understand what's going on if you say who your tax advisor was/is and what you paid 20% of and why. There's tax advisors and there's tax advisors. Unfortunately not all of them are reputable.

[Superfly]

I would think the application of penalties would depend on whether you can demonstrate to HMRC that you were neither dishonest nor careless in reporting your income and that you took reasonable steps to seek professional advice in managing your tax affairs. Was the scheme recommended by an accountant? Have you got any of the promotional material which may have made false claims of professional approval or oversight? etc

[eek]

my point was that any tax advisor may have views that differ from how HMRC see things>..

So going back a bit - what do you mean paid 20% to Pembroke? At the time you received the money or more recently to the administrators at Grant Thornton?

and equally did you include the loans on your initial tax return or in a correction. As that’s the type of thing that determines the level of penalties

and yes those questions are all relevant in working out what is going on..

[AnthonyB]

I wasn't aware HMRC provided tax advisors to the general public. Do you have an answer to the question posted?

[eek]

Is your tax advisor employed by HMRC, if not their opinion may not tally with HMRCs.