Umbrella in administration

[eek]

Latest on Elite Management Consultancy :

https://x.com/DanNeidle/status/18082...Icz69VRPA&s=19

So another HMRC screw up - in a position where granted there was little actual financial end result but justice was required.

Shame the tax demands HMRC are sending to the victims of Elite Management aren't revoked by this screw up - now that would be justice...

[bylren001]

Latest on Elite Management Consultancy :

https://x.com/DanNeidle/status/18082...Icz69VRPA&s=19

[eek]

Oh there is news but I don't know what it means for people

If you look at https://find-and-update.company-info...filing-history you will see that the firm has moved from Administration to Liquidation because that gives them more power to recover money from other sources.

Whether that impacts any contractors who were using the scheme is unknown mainly because while I've seen threats that contractors may need to pay back the loans I don't remember anyone being asked by a liquidator* to do so as HMRC are usually the largest creditor and are happy if the contractor has paid it directly.

* edit made because I temporarily forgot about the Felicitas claims (where the scheme organizers are the people trying to get the money).

[cojak]

Hi guys. Has anyone had any updates on the Elite administration and interaction with HMRC. I am currently involved in a similar situation with a potential spin-off from Elite. Anyone actually managed to get them to write-off the loans? So far, HMRC has indicated it will do its best to recover the amounts from the Umbrella Company, but I feel like it will end up in the same situation as Elite. I dont understand how these UK-incorporated companies can keep pulling the scam repeatedly with no penalty against them. These guys should be put behind bars.

No further news I’m afraid.

[bylren001]

Hi guys. Has anyone had any updates on the Elite administration and interaction with HMRC. I am currently involved in a similar situation with a potential spin-off from Elite. Anyone actually managed to get them to write-off the loans? So far, HMRC has indicated it will do its best to recover the amounts from the Umbrella Company, but I feel like it will end up in the same situation as Elite. I dont understand how these UK-incorporated companies can keep pulling the scam repeatedly with no penalty against them. These guys should be put behind bars.

[laxinmo]

Thanks all for the input. Well not positive reading especially on potential outcomes. I wonder how reasonable any administrators will be and if a deal to pay smaller % of the loan can be agreed. I guess just a case of waiting to see what will happen but looks likes another chunk of cash will be thrown down this endless pit!

[eek]

I wasn't referring to IHT. The OP thought paying back the loans would remove the (disguised remuneration) income tax liability. My understanding is it won't.

My mistake - but yep you are right there - as the OP has received the money HMRC regard it as income for the work done - the fact someone else regards it as a loan is not HMRC's issue....

I've posted previously about Schrodinger money where multiple people look at it and see it as different things (taxable income / a loan) at the same time..

[DealorNoDeal]

The question is not does the loan being written off solve an IHT issue - it's will the administrator chase those who have received "loans" to recover the debt owed by Elite to HMRC...

I wasn't referring to IHT. The OP thought paying back the loans would remove the (disguised remuneration) income tax liability. My understanding is it won't.

[cojak]

More information on these types of umbrella in this thread in the Umbrella section:

https://forums.contractoruk.com/umbr...quidation.html

[eek]

I don't think that will work. My understanding is that the tax liability has already arisen, so paying back the loans now won't make any difference.

The question is not does the loan being written off solve an IHT issue - it's will the administrator chase those who have received "loans" to recover the debt owed by Elite to HMRC...

Followed by the second question - will the administrator

1) demand full payment from those with loans
2) ignore creditors who have paid HMRC
3) ignore the amount to HMRC but chase the rest

The simple fact is that we don't know enough to be able to answer any questions...

[cojak]

I don't think that will work. My understanding is that the tax liability has already arisen, so paying back the loans now won't make any difference.

Yes, I think that is indeed the case - HMRC will still want their pound of flesh.

[DealorNoDeal]

Almost feel like it would be better just to pay back the loans and avoid the tax liability than settle with HMRC as otherwise I could be in the ridiculous position of paying the tax liability on the “loans” and then paying back loans to HMRC creditors.

I don't think that will work. My understanding is that the tax liability has already arisen, so paying back the loans now won't make any difference.

[laxinmo]

Hi Eek

thank you for your reply. As I feared more uncertainty. No fortunately I was only naive enough to deal with elite but am aware of contractor care as they are named as creditors in Elites administration. Are there any similar previous case studies of umbrellas going into administration and how that played for contractors? Would you hedge any bets on the likely outcome of the loans? Almost feel like it would be better just to pay back the loans and avoid the tax liability than settle with HMRC as otherwise I could be in the ridiculous position of paying the tax liability on the “loans” and then paying back loans to HMRC creditors.

[eek]

Hi everyone

Hoping for some advice from this life saving community!

I have nearly concluded my settlement process with HMRC with a final amount yet to pay. My umbrella was elite management and consultancy who in the last few weeks gone into administration with debt/tax liability of £20million to HMRC. Prior to this I had some contact with Elite but they would not entertain writing off any of my “loans”.

Wondering what to expect now? Feel like I’ve dealt with HMRC and tax liability but now have the other issue of what is going to happen to my loans. Is there a likelihood I will have to pay the loan amount back as creditors come knocking or is there potential it can still be written off? If it were to be written off will I be expected to pay more tax on it? Wondering if this could be another felicitas situation.

Cheers

Sadly, No one outside of the administrators knows what the administrator’s plans are.

elite (from memory) didn’t use trusts so it’s not a Felicitas type situation - that was a bunch of cowboys seeking a final payoff this is an administration with HMRC as a creditor so it’s different and it’s hard to say what will happen

by the way you weren’t transferred to contractor care or PAYEme were you? As both of them are now in HMRC’s sights as well..

Edit - based on https://forums.contractoruk.com/umbr...ml#post2565107 the scheme was via "Capital Investment" Payments

so contrived and won't work even though both PAYEme and Contractor care are arguing that the DOTAS SRN's they received recently are invalid - that marks a change as well the schemes used to market themselves as HMRC approved using their DOTAS SRN as proof.

[laxinmo]

Hi everyone

Hoping for some advice from this life saving community!

I have nearly concluded my settlement process with HMRC with a final amount yet to pay. My umbrella was elite management and consultancy who in the last few weeks gone into administration with debt/tax liability of £20million to HMRC. Prior to this I had some contact with Elite but they would not entertain writing off any of my “loans”.

Wondering what to expect now? Feel like I’ve dealt with HMRC and tax liability but now have the other issue of what is going to happen to my loans. Is there a likelihood I will have to pay the loan amount back as creditors come knocking or is there potential it can still be written off? If it were to be written off will I be expected to pay more tax on it? Wondering if this could be another felicitas situation.

Cheers