HMRC advice on Dodgy Umbrellas

[cojak]

Find out what to do if an agency or umbrella company offers to reduce your tax liability and increase your take home pay.

[lucyclarityumbrella]

Nice to see something actually in writing from them! Although rather than the "HMRC do not approve any scheme" comment - may be useful if they did actually start approving some

[cojak]

Find out what to do if an agency or umbrella company offers to reduce your tax liability and increase your take home pay.

...and more here:
Tax avoidance schemes aimed at contractors and agency workers - GOV.UK

[eek]

...and more here:
Tax avoidance schemes aimed at contractors and agency workers - GOV.UK

See also

Umbrella companies offering to increase your take home pay (Spotlight 45) - GOV.UK

and Comparison and broker websites marketing umbrella companies are not always what they seem (Spotlight 55) - GOV.UK

The latter one is important - there is no magic formula that allows an umbrella to save you money. The difference is always in the assumptions they make as literally the only differences are:-

1) the umbrella fee (£50-£150 a month which ends up being £30-£80 of your after tax income)
2) any salary sacrifice options that the umbrella offers (pension, cycle to work, possibly cars)
3) whether the umbrella is small enough to avoid the Apprenticeship Levy
4) Um that's it.

[GregRickshaw]

Ironic

"Previous users of avoidance schemes were told that their arrangements were HMRC compliant, but later found out, to their cost, this was not true."

I love that comment... Actually most of them were compliant at the time, HMRC decided they weren't compliant retrospectively.

You know that road you drove at 50mph 5 years ago - well last week we changed it to 30mph so we are issuing you a speeding ticket from 5 years ago.

Agree though it's good to have a tiny bit more guidance even if it's along the lines of "If it seems too good to be true..."

[eek]

"Previous users of avoidance schemes were told that their arrangements were HMRC compliant, but later found out, to their cost, this was not true."

I love that comment... Actually most of them were compliant at the time, HMRC decided they weren't compliant retrospectively.

You know that road you drove at 50mph 5 years ago - well last week we changed it to 30mph so we are issuing you a speeding ticket from 5 years ago.

Agree though it's good to have a tiny bit more guidance even if it's along the lines of "If it seems too good to be true..."

Sorry but that's complete Bulls**t. HMRC's biggest problem is that they weren't checking up on scheme membership quickly enough but I've not seen 1 scheme in the past few years that I would pass as legal (at the time, let alone afterwards).

Also wtf do you mean by the word compliant...

[GregRickshaw]

Sorry but that's complete Bulls**t. HMRC's biggest problem is that they weren't checking up on scheme membership quickly enough but I've not seen 1 scheme in the past few years that I would pass as legal (at the time, let alone afterwards).

Also wtf do you mean by the word compliant...

What was all the overturning about then? I had a ton of letters/correspondence around how schemes were being over-turned which suggests to me they had to be changed to be collapsed.

HMRC even worded letters to many of us using terms such as over-turned and collapsed which suggest they were legal at the time. Have they (HRMC) actually proved they weren't legal yet?

[eek]

What was all the overturning about then? I had a ton of letters/correspondence around how schemes were being over-turned which suggests to me they had to be changed to be collapsed.

HMRC even worded letters to many of us using terms such as over-turned and collapsed which suggest they were legal at the time. Have they (HRMC) actually proved they weren't legal yet?

Let's try this a different way - exactly how large was your tax bill and how much have you had to repay the trust your scheme used. Also have HMRC added penalties to your bill?

This is, however, the wrong forum to discuss your financially disastrous decision to use a scheme rather than a legitimate (none tax avoiding) umbrella.

[GregRickshaw]

Let's try this a different way - exactly how large was your tax bill and how much have you had to repay the trust your scheme used. Also have HMRC added penalties to your bill?

But overturned means that a higher tribunal decided that the decision of the lower tribunal was wrong. And this is the wrong forum to discuss your financially disastrous decision to use a scheme rather than a legitimate (none tax avoiding) umbrella.

Woooah there not looking for a fight here, thank for the empathy, just thought it was ironic the quote on the HMRC site.

Not sure if they were illegal why we had to declare DOTAS in the SA then doesn't seem you would let HMRC know you were using something illegal.

As you say though no place for this. Over and out

[eek]

Woooah there not looking for a fight here, thank for the empathy, just thought it was ironic the quote on the HMRC site.

Not sure if they were illegal why we had to declare DOTAS in the SA then doesn't seem you would let HMRC know you were using something illegal.

As you say though no place for this. Over and out

If you keep to the correct forum you will get Empathy, post about schemes on this thread and I will come out with all guns blazing to avoid anyone thinking a scheme is a good idea.