Reply to: Opus bestpay umbrella - do not use it! It's highly toxic!!!!!

[cojak]

As an addendum to this thread…

Mr Adrian Sacco has been banned from being a Director for 8 years


https://www.insolvencydirect.bis.gov...umber=09473810

[eek]

Let's just quote this bit, shall we?

The comments made at [52(2)] also apply here. In my view, it is reasonable for an informed observer to judge whether the main purpose of the arrangements was to enable the client to obtain a deferral of tax by reference to the nature and timing of the tax charge which it is reasonable to suppose the client would otherwise be subject to absent the arrangements. In this case, it would be reasonable to suppose that, but for the arrangements, the participants would have simply provided their services to the end-clients for remuneration and would have been taxed accordingly.

Worth quoting 52(2) at the same time

For the purposes of determining whether there are notifiable proposals or arrangements, the question is not whether the arrangements involve tax avoidance but whether an informed observer (having studied the arrangements) would conclude that the main purpose of the arrangements was to enable a participant to obtain a tax advantage which specifically includes an advantage in the form of the deferral of any payment of income tax. As already set out, in my view, there can be no doubt that such an observer would conclude from the design and effect of the arrangements that their main purpose was to enable the participants to defer paying income tax on the sums received for their work (if not to avoid tax altogether). There is no other discernible commercial reason for the use of the deferral mechanism under the services contract and the loan. Mr Sacco asserted that the arrangements were made for administrative convenience but these elements of them are plainly not needed for that and do not facilitate that.

[cojak]

Revenue & Customs v Opus Bestpay Ltd (DOTAS - Application for order that certain arrangements are notifiable) [2020] UKFTT 408 (TC) (18 August 2020)

Revenue & Customs v Opus Bestpay Ltd (DOTAS - Application for order that certain arrangements are notifiable) [2020] UKFTT 408 (TC) (18 August 2020)

This is such a good demolition of a scheme that I'm saving it for future reference and will point anyone asking about such schemes to it.

Whether they then read it is their lookout.

[cojak]

And lastly...

63. This document contains full findings of fact and reasons for the decision. By virtue of Article 3(i) of the Appeals (Excluded Decisions) Order 2009, no right of appeal arises in respect of this decision.

[cojak]

Let's just quote this bit, shall we?

The comments made at [52(2)] also apply here. In my view, it is reasonable for an informed observer to judge whether the main purpose of the arrangements was to enable the client to obtain a deferral of tax by reference to the nature and timing of the tax charge which it is reasonable to suppose the client would otherwise be subject to absent the arrangements. In this case, it would be reasonable to suppose that, but for the arrangements, the participants would have simply provided their services to the end-clients for remuneration and would have been taxed accordingly.

[Ian Richardson GT Leeds]

Revenue & Customs v Opus Bestpay Ltd

Revenue & Customs v Opus Bestpay Ltd (DOTAS - Application for order that certain arrangements are notifiable) [2020] UKFTT 408 (TC) (18 August 2020)

Revenue & Customs v Opus Bestpay Ltd (DOTAS - Application for order that certain arrangements are notifiable) [2020] UKFTT 408 (TC) (18 August 2020)

[webberg]

It is perhaps ironic that the proposed changes to IR35 in the private sector will see a shift in the balance of power.

Until now, end client tells an agency that they need somebody for a contract.

Agency finds that somebody and arranges the interview.

If suitable, the agency then decides how the somebody should complete the contract, either via a PSC or an umbrella.

In a perfect world, the route chosen will be the one that creates the best fit between role and contractor. In reality I suspect that's a decision that is influenced by whoever is paying the best commissions at that time.

For those umbrella and agencies in a trade body, there are some rules around this. For those who choose not to be so bound, ... ?

The end client comes to an agreement with agency that passes on certain risks.

Post IR35 reform, the ability to pass on the risk that the tax status of the contractor is correct, becomes much more difficult. Yes, end client and agency can agree that if the tax status is found to be wrong in due course, then end client pays HMRC (legal obligation) and claims against agency.

That however is only as good as the agencies credit standing and integrity.

This risk is why we see blanket "inside IR35" rulings in the public sector and will in the private sector despite HMRC claims to the contrary.

Most contractors will accept these as to them, getting the job is probably more important than a few percent on take home and suing your end client for getting the tax wrong is likely to be a career limiting operation.

In these scenarios, are agencies prepared to back an assertion of "outside IR35" with some form of guarantee that the contractor will not suffer financially? I don't know.

Umbrellas of course, those that are compliant, have no such worries.

Will we see therefore the rise of hybrid entities ? I don't know.

[lucyclarityumbrella]

In short, YOU are expected to exercise a degree of due diligence in entering any arrangement to ensure that you understand the process and its risks.

And even more so when IR35 hits the Private Sector.
PSL's are generally put together, based on due diligence but this may not always be the case. Emphasis on dd being completed by the contractor has to be there before a decision is made as to who to work through!

[lucyclarityumbrella]

I don't see why CUK does not run simple [and free] background checks before listing agencies or umbrellas

Or give me a shout - I have some very useful research from over the years

[webberg]

I think the moans should be directed more to HMRC to get rid of them than an independent website.

One of the persistent myths in the contracting sector is that HMRC has the ability to close a business which has the capacity, in some eyes, to create tax problems for those who use them.

HMRC does not have that ability and never has had it.

In cases involving fraud and the most egregious of tax theft, HMRC can investigate and call for licences to revoked (if the business is in a regulated industry), but otherwise is relatively powerless.

The ability to close a business lies with the local Trading Standards units and perhaps some sections of central Government for specialised industries.

Any firm offering tax advice is doing just that - offering advice. They are not making a decision for you and cannot be held responsible if you use a scheme that later is considered to be avoidance.

If that firm is a professional adviser, regulated by one of the professional institutes, then they are obliged to tell you about the risks as well as the rewards. That risk might be that HMRC consider the arrangement now or in the future, to be avoidance.

Lack of such a warning will give you, prima facie, a claim for negligence.

Many firms operating in the contracting sector, agencies, umbrellas, accountants for limited companies are NOT regulated. They may belong to a trade association and some agencies are required to comply with employment law, but the penalties that may arise are not tax based and not within HMRC's gift to apply.

In short, YOU are expected to exercise a degree of due diligence in entering any arrangement to ensure that you understand the process and its risks.

[lucyclarityumbrella]

If we were not compliant do you really think for one nano second I would be pursuing ContractorUK to clean up their paid listings which we are listed on....I give up!

Monitoring it for an online contractor business would be nigh on impossible, we all know that! One minute they are UK based, then next they appear in Panama! I think the moans should be directed more to HMRC to get rid of them than an independent website.

[WTFH]

I'm not posting anymore on the matter - I think I've said all that's needed, there's hardly that many listings to trawl through after all. It's a call to action to get ContractorUK to clean up their Umbrella listings section. If we were not compliant do you really think for one nano second I would be pursuing ContractorUK to clean up their paid listings which we are listed on....I give up!

You make claims, but won't be specific.
You say that we have acted in the past, but word it like it's a complaint.

Tell us exactly which companies are listed on that page which you think/believe/know are offshore and doing something illegal/dodgy.

[Matt FPSGroup]

Please be specific rather than making your random accusations.

It's not like you're touting business for a company based in the Isle of Man, is it? Where is your administration centre? oh, look...

Administration Centre, Ramsey, IM8 1GB

I'm not posting anymore on the matter - I think I've said all that's needed, there's hardly that many listings to trawl through after all. It's a call to action to get ContractorUK to clean up their Umbrella listings section. If we were not compliant do you really think for one nano second I would be pursuing ContractorUK to clean up their paid listings which we are listed on....I give up!

[WTFH]

Just to bring this thread back to life – I still see some potentially questionable listings under the PAID FOR ‘Umbrella Companies’ section on this site. Would you believe it Bestpaymentservices.co.uk which were called out back in February on this thread, disappeared over night shortly after…who would have guessed that?!?!

Last time ContractorUK were called out for listing potentially dodgy operators in their paid listing they stated “Cheers guys. We do our best to ensure that services on the umbrella listings are your standard PAYE type services. We have knocked back many requests for the 90% style take home schemes and will continue to do so - so be aware that we do check all companies before listing them. Will have a look at this in more detail and will post again shortly.”

No conclusive evidence but certainly a lot of indications telling me your checks are potentially still not up to scratch. A number of the listings in your paid directory appear to be new umbrellas all registered in the last 2 years with near identical website layouts and documentation (based on my web experience it certainly looks to me they are all run by the same operator – indeed some share the same company directors etc). By and large the only new umbrellas to start up in the last two years have been dodgy ones taking advantage of the IR35 situation or those looking to distance themselves from past identities….just saying. Funnily enough some of the domains share domain registration similarities to guess who….bestpay.co.uk and bestpaymentservices.co.uk. It’s almost like they keep changing their identity for some reason…

The cherry on the cake…One of the operators clearly states on their website ‘Improve your take-home pay’ – *alarm bells*. Your checks are obviously not fit for purpose if simple stuff like that is not being picked up on.

Please be specific rather than making your random accusations.

It's not like you're touting business for a company based in the Isle of Man, is it? Where is your administration centre? oh, look...

Administration Centre, Ramsey, IM8 1GB

[Matt FPSGroup]

Just to bring this thread back to life – I still see some potentially questionable listings under the PAID FOR ‘Umbrella Companies’ section on this site. Would you believe it Bestpaymentservices.co.uk which were called out back in February on this thread, disappeared over night shortly after…who would have guessed that?!?!

Last time ContractorUK were called out for listing potentially dodgy operators in their paid listing they stated “Cheers guys. We do our best to ensure that services on the umbrella listings are your standard PAYE type services. We have knocked back many requests for the 90% style take home schemes and will continue to do so - so be aware that we do check all companies before listing them. Will have a look at this in more detail and will post again shortly.”

No conclusive evidence but certainly a lot of indications telling me your checks are potentially still not up to scratch. A number of the listings in your paid directory appear to be new umbrellas all registered in the last 2 years with near identical website layouts and documentation (based on my web experience it certainly looks to me they are all run by the same operator – indeed some share the same company directors etc). By and large the only new umbrellas to start up in the last two years have been dodgy ones taking advantage of the IR35 situation or those looking to distance themselves from past identities….just saying. Funnily enough some of the domains share domain registration similarities to guess who….bestpay.co.uk and bestpaymentservices.co.uk. It’s almost like they keep changing their identity for some reason…

The cherry on the cake…One of the operators clearly states on their website ‘Improve your take-home pay’ – *alarm bells*. Your checks are obviously not fit for purpose if simple stuff like that is not being picked up on.