What are the liabilities with umbrella's such as Garraway Ltd.

[Scribble Squad]

Hi all:

Long time member, little time poster. I've been sparingly reading the pros & cons of umbrella corps. and see that there are some passionate advocates from both camps. It's great to read both sides. Legally however, I'm still confused as to the liabilities. I've been with them for a while now and have had a very good experience, no complaints at all. So far its been pretty much what's written on the tin. But I'm a little on edge about the long term liabilities of working under such a system.

Mainly,

•*I believe Garraway would be considered a 'loan scheme', am I wrong?
•*If so, how realistic is the notion that they could call back the 'loans' they've made to me at some point in the future, and would I have any legal standing in not paying it?
• I receive contracts from them quite regularly, I assume this is a good thing as they're simply keeping on top of new legislation, could they effectively change anything in these new contract and loan agreements that would effect me negatively?
• I have no desire of falling foul of HMRC - does being under an umbrella rule flat out that I am? The 15% isn't actually the biggest draw, personally I don't like all the self accountancy and paperwork required under an Ltd. (even after hiring accountants). If HMRC did rule out that the company was in the wrong, would tax owed be retrospective?

Apologies if any of the questions are flat out amateur, I probably should have asked prior to getting involved - however I would appreciate just the facts and no scare mongering if possible. I just want to make an informed decision.

Thanks for any help in advance.

[northernladuk]

http://forums.contractoruk.com/accou...xperience.html

http://forums.contractoruk.com/accou...nsultants.html

http://forums.contractoruk.com/gener...good-true.html

**** it... all here...

https://www.google.co.uk/search?q=Ga...sm=93&ie=UTF-8

Bearing in mind the situation you are in a little bit more research might have been prudent hey.....

[GazCol]

Ouch.

[Scribble Squad]

http://forums.contractoruk.com/accou...xperience.html

http://forums.contractoruk.com/accou...nsultants.html

http://forums.contractoruk.com/gener...good-true.html

**** it... all here...

https://www.google.co.uk/search?q=Ga...sm=93&ie=UTF-8

Bearing in mind the situation you are in a little bit more research might have been prudent hey.....

Ugh, it's never enough

Is my situation particularly bad?

Thanks for the links. Again, there's a lot of stuff in there with users making comments regarding my questions but nothing directly addressing the specifics (as far as I can see from perusing the posts mentioning 'Garraway'). A lot of people are doing this, surely a lot more people would be up in arms if they were getting hosed on a regular basis - no? :\

[northernladuk]

Ugh, it's never enough

Is my situation particularly bad?

Thanks for the links. Again, there's a lot of stuff in there with users making comments regarding my questions but nothing directly addressing the specifics (as far as I can see from perusing the posts mentioning 'Garraway'). A lot of people are doing this, surely a lot more people would be up in arms if they were getting hosed on a regular basis - no? :\

You are a troll aren't you?

Just in the slim case you are not have a very good read of these threads.......

http://forums.contractoruk.com/hmrc-scheme-enquiries/

Also some extra reading...

http://www.allumbrellacompaniesareeq...mpanies/1.html

[Scribble Squad]

You are a troll aren't you?

Just in the slim case you are not have a very good read of these threads.......

haha there's a first. Afraid not. Will do. Thanks again.

[cojak]

That an interesting quote from the article:

The contractor received a continual stream of email correspondence from a group of companies that all appear to be linked to the same outfit.....

It sounds as if some companies have a 'sucker list'...

BBC News - Fraudsters' 'suckers list' revealed by regulator

[LisaContractorUmbrella]

A tax avoidance loan scheme is not an umbrella company - an umbrella company is an employment intermediary that sits between a worker and a recruitment agency or hirer. The worker will be engaged under a contract of employment (contract of service) with PAYE tax and NIC’s charged on employment income.

[ASB]

•*I believe Garraway would be considered a 'loan scheme', am I wrong?

I would rather have thought that you might know that having joined them. But it certainly looks that way.

•*If so, how realistic is the notion that they could call back the 'loans' they've made to me at some point in the future, and would I have any legal standing in not paying it?

Well the fact that you use quotes round 'loans' is a bit telling as to what you think they are. But repayment etc will no doubt be in accordance with the loan agreement you signed [in effect yes they can in theory and there could be risk of that were they to go bust and garraway are holding the loans, since they are assets the receivers are obliged to chase. It is unlikely they are structured this way]. What ever legal standing you may or may not have is rather dependant on the agreement you signed. Usually if you have a loan and it is requested to be repaid and you choose not to you can be in a real tulip storm.

• I receive contracts from them quite regularly, I assume this is a good thing as they're simply keeping on top of new legislation, could they effectively change anything in these new contract and loan agreements that would effect me negatively?

You should know, it would be apparent from reading them. But yes, of course they could change terms. Down to you to accept or otherwise.

• I have no desire of falling foul of HMRC - does being under an umbrella rule flat out that I am? The 15% isn't actually the biggest draw, personally I don't like all the self accountancy and paperwork required under an Ltd. (even after hiring accountants). If HMRC did rule out that the company was in the wrong, would tax owed be retrospective?

Well, you are likely falling foul. Tax owed is likely to be from when you started the scheme.

Of course I have no knowledge of the details of the arrangements. May they have discovered the magic beans required for a secure healthy no tax scheme.

[malvolio]

Tax owed is likely to be from when you started the scheme

On that point, the estimate will be along the lines of first working out total gross income since you started using the scheme, i.e. what has been invoiced for work done. HMRC will assume that is all earned income, therefore for each year work out the tax due under normal PAYE rules including your usual personal tax free allowances. Add it all up and add 5%. Take of whatever tax you have paid for that period. That is the minimum amount due if HMRC go for it.