Overdrawn Capital Account Scheme (Aston Mae / Glen Mae / Procorre)

[Smurfburger]

@ITMark - agree that its not worth the paper its written on regards to Glen May and they are covering their backs, however in 2019 HMRC will have the right to request all LLP's in UK and overseas to declare partner overdrawn capital balances and Glen May has just effectively written this down to zero by declaring a profit share. This now means HMRC will be seeking individuals to declare it. My understanding is that with overseas LLP's HMRC's position has been to tackle it with the individual directly via self assessment challenges so I suspect at some point they will be asking us if we have received a profit share or capital payments that have not been paid back to the LLP.

Would be good to know if anyone else has a different view on this.

Not sure what you mean by "not worth the paper it's written on". Surely, if the new legislation dictates that LLPs cannot defer the declaration of profit share and must declare any missed years, then isn't Glen May doing the correct thing?

My letter states that this is the penultimate financial accounts and so there'll be another one next year. If the tax has been paid on all declared profit share, then isn't that a good thing? Granted, it means we have a lot of tax to find in one go but HMRC cannot argue that no tax has been paid. They might contest the declared profit share values but that is a different argument and Glen May would need to provide the statements accordingly.

[Smurfburger]

As far as I know Glen May was dissolved around the end of last year, and deregistered at Companies House. It appears to be the pattern that Procorre and its other guises follow. Close one company run by them and open a new one. At the very least it means you can’t find information on them on the internet.

Glen May LLP is registered in Singapore and is still operating.

[nucastle]

Sounds like a great PR story, however they still operate a 'scheme' where either by your Ltd company or via an Umbrella your contract earnings goes to their offshore LLP, and then funds are 'advanced' back to you via a capital overdrawn account payment.

It's aggressively sold (or was) as a tax avoidance strategy, in the past by what appeared to be some kind of referral scheme or agency who cite the 83% retention rate as being advantageous over the typical 75% or so you would have gotten by operating a Ltd company.

What wasn't however disclosed, was that the 75% retention in the Ltd company scenario was because 25% of tax is legitimately paid, whereas with their scheme, the 17% consists of their margin, and what appears to be something more like low single digits of tax paid as income tax on very low partnership 'drawings' of around the 10-11k a year level.

The problem now is that Procorre are stating that all along this was never about tax avoidance, and that for the magic 17% you handed them you got a host of benefits etc etc, oh and you still DO have to pay all the tax after all (which was never EVER disclosed). The reality was that apart from a few very low cost benefits (certainly not worth say 20 grand a year you handed to them as their 'cut' of your earnings, more like 500 quid) you still did all the leg work as a contractor yourself, but the 'umbrella' you operated through was just one of their intermediaries.

As far as I know, nobody has EVER seen a set of partnership accounts for any year, showing any capital overdrawn balances, let alone had the opportunity to participate in any way possible as a 'partner'. And as stated before, being sent letters with no addresses, with photocopied signatures declaring what appear to be arbitrary numbers on them to do little more than theoretically balance the books of some offshore entity, holds about as much water as a colander. It's been rightfully stated by others that the idea that you can basically declare profits at any random point in the future is pretty laughable. Now the 2019 loan charge and various crackdowns are starting to come along, all these profit allocations are being dumped on the poor contractors who were duped into what they thought was a canny way to save on paperwork and increase their retention by 5-7% or so. The 'LLP' gets off scott free by basically just stating this was simple tax deferral. The contractors however, were misled.

The right way out of this is settlement, and not trying to play along with the game of this lot.

[Fred Bloggs]

A little off topic perhaps, but did anyone ever really get to understand how Procorre worked? For a short time, they actually used to post on CUK but I think they got scared off by the questions they were being asked. As a curious bystander I have tried to find out what I could about them in the public domain, of which there appears to be nothing of substance at all. They always seemed a very opaque, mob to me.

[Telco7676]

External advise

Regards to comments about why are we listening to Procorre, GWAS, Burnside etc. and seek external advice.

Has anyone done this yet? Happy for you to PM me and also to be added to any whatsapp groups where people in the same position can discuss and possibly get advice as a group.

[comodorepet]

another chap here in Procore and in the process of doing the buy out. Can I be given PM rights so I can ask to join the WhatsApp group please?

[Dell]

another chap here in Procore and in the process of doing the buy out. Can I be given PM rights so I can ask to join the WhatsApp group please?

Don't do it mate, its just another scam to get you in even deeper with Procorre and deferring the inevitable tax bill, how can you listen or trust anything they have said after all of this carry on?

For info HMRC are already investigating Entrepreneurs’ Relief tax avoidance schemes like the one Procorre are now offering, see below link:

https://www.gov.uk/guidance/capital-...oidance-scheme

[comodorepet]

oh dear oh dear. Not good reading here.
Having just registered interest for settlement of EBT Loans in FY 10/11, I'm wondering now whether I should be registering interest for settlement for the years since, where I've been receiving capital account payments?

Do HMRC consider LLPs as schemes like the trusts?

Intend to stop doing LLP payments. Just deciding whether to go full PAYE Umbrella, or keep running the Ltd Co and risk IR35 still...

still looking for PM ability to join the WhatsApp group please.

[Smurfburger]

Don't do it mate, its just another scam to get you in even deeper with Procorre and deferring the inevitable tax bill, how can you listen or trust anything they have said after all of this carry on?

For info HMRC are already investigating Entrepreneurs’ Relief tax avoidance schemes like the one Procorre are now offering, see below link:

https://www.gov.uk/guidance/capital-...oidance-scheme

That document is quite specific about Cyprus but not sure how relevant that is.

The upshot is, if you don't understand then don't do it! Go for a decent umbrella, accept that you won't take home so much but know you can sleep soundly at night. This is from someone who has been bitten by loan schemes and Glen May. The hassle is not worth any gains they say you can make.

[dog]

A little off topic perhaps, but did anyone ever really get to understand how Procorre worked? For a short time, they actually used to post on CUK but I think they got scared off by the questions they were being asked. As a curious bystander I have tried to find out what I could about them in the public domain, of which there appears to be nothing of substance at all. They always seemed a very opaque, mob to me.

Why are procorre being so quiet about all of this?