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

[dog]

That is not correct. My letter was dated 28th March but was received after April 6th and so still relates 2017/18 in much the same way as banks send out interest statements, after 6th April, that relate to the previous tax year.

Ok wasn't aware as haven't had a letter from them since dec 2016.

[AnotherJohnDoe]

I feel your pain. I have been bitten by contractor loan schemes and Glen May LLP.

I did get an email from a senior HMRC representative who stated that Glen May LLP does not seem to be a solution that would be hit by the loan charge.

If you have Notices of Assessment for the Glen May years that are suspended on appeal, paying your tax liability on the declared profit share will hopefully go towards addressing those suspended Notices of Assessment.

HMRC has taken two approaches with Glen May partners that I am aware of. The first is sending out Notices of Assessment. The second, which is what I have had, is to check my returns for the Glen May years and ask lots of questions. I have never been asked to pay any money.

In January 2018, I paid the Glen May tax relating to calendar year 2012. In January 2019, I will pay the tax for the figure on the latest letter, which will be considerable, but at least HMRC will not be able to say no tax has been paid. They may well query the amount.

The two approaches kind of indicates that they might not be certain of their ground. To my knowledge, no Glen May partner has been taken to a tribunal but that's not to say they won't.

If I could turn back the clock and do things differently...

Can you not pay tax for the years in which the payments were received?

It seems crazy to be told you have additional income out of the blue because then you'd be paying tax in a year when no such money was received

Of course if that pushes you into a higher income bracket as a result it makes even less sense

And if you're told this is the penultimate profit share then you'd have to find a way to live with relatively little income for the tax year that the next profit share falls in, unless you want to run into the same problem again

[dog]

Can you not pay tax for the years in which the payments were received?

It seems crazy to be told you have additional income out of the blue because then you'd be paying tax in a year when no such money was received

Of course if that pushes you into a higher income bracket as a result it makes even less sense

And if you're told this is the penultimate profit share then you'd have to find a way to live with relatively little income for the tax year that the next profit share falls in, unless you want to run into the same problem again

Don't forget payments on account!
Since it is likely everyone paying tax on these profit share numbers will end up owing over 1000 on tax then you also have to make payments on account (basically paying tax in advance)
Then you have to argue with HMRC why you shouldn't have to make these payments on account
It's a win win for HMRC

[Smurfburger]

Don't forget payments on account!
Since it is likely everyone paying tax on these profit share numbers will end up owing over 1000 on tax then you also have to make payments on account (basically paying tax in advance)
Then you have to argue with HMRC why you shouldn't have to make these payments on account
It's a win win for HMRC

We should be able to negotiate the payments on account because we know next year will be less.

[Smurfburger]

Having been contacted by someone, on this forum, with regard to Glen May LLP offering to acquire their companies, I challenged Glen May on that point and this is their response:

"We have been told by ex-Glen May consultants who moved over to Procorre that they have had that option offered to them, the detail would be between Procorre and the Consultant.



Glen May no longer operate in the UK our last remaining consultants were acquired by Procorre in April 2017 which is why we have never offered it.



We are aware of various comments on forums which is primarily fuelled by people either employed by CCUK or other companies trying to generate business.



We can assure you that this is a valid profit share allocation and we are unsure why people would question it as they only need to ask their accountant.



We can also assure you that everyone who was with Glen May has received the same message, no one has been privy to extra information or offers.



Kind regards,

Glen May Admin Team"

Hopefully, this will provide at least some comfort to former Glen May LLP partners...

[webberg]

I've tried to resist this message but my professional conscience will not let me.

There is above a couple of posts from Iliketax who makes some excellent points around the way in which offshore partnership schemes could or should be taxed in the UK.

We have a number or clients who have used these schemes and we have shared with them an analysis that in many ways is similar to those from Iliketax and others but has the benefit of information that he/she probably has not seen.

Whilst views may vary slightly, none of them match what you are being told by Glen May.

I would go so far as to say that I can see no basis in UK tax legislation for the advice given to you by Glen May.

I would therefore caution all users to at least get a second opinion you can verify (as opposed to an anonymous poster here) before you commit to a course of action that can have unpredictable consequences.

[nucastle]

Having been contacted by someone, on this forum, with regard to Glen May LLP offering to acquire their companies, I challenged Glen May on that point and this is their response:

"We have been told by ex-Glen May consultants who moved over to Procorre that they have had that option offered to them, the detail would be between Procorre and the Consultant.



Glen May no longer operate in the UK our last remaining consultants were acquired by Procorre in April 2017 which is why we have never offered it.



We are aware of various comments on forums which is primarily fuelled by people either employed by CCUK or other companies trying to generate business.



We can assure you that this is a valid profit share allocation and we are unsure why people would question it as they only need to ask their accountant.



We can also assure you that everyone who was with Glen May has received the same message, no one has been privy to extra information or offers.



Kind regards,

Glen May Admin Team"

Hopefully, this will provide at least some comfort to former Glen May LLP partners...

So since they have finalised their accounts, ask to see a copy of these completed accounts, which of course as a partner you would think you are entitled to. As well as a statement of your capital overdrawn balance. They will of course, send you these straight away ....... you would think.

[Telco7676]

It would be great to see some accounts, they have promised them each year and never delivered.

The comment about "We can also assure you that everyone who was with Glen May has received the same message, no one has been privy to extra information or offers"...is not true as I was with Glen May and have not had any letters since 2016.

So since they have finalised their accounts, ask to see a copy of these completed accounts, which of course as a partner you would think you are entitled to. As well as a statement of your capital overdrawn balance. They will of course, send you these straight away ....... you would think.

[stigma]

Hi,
I also received in the past 2 years multiple letters from HMRC questioning my income and the money I received from the partnership.
Two weeks ago, I received a letter from GlenMay about profits much higher than expected that will be allocated to my overdrawn capital account.
My understanding so far is that now I have to pay tax & NI on the profit share on the higher rate, which wouldn't have been the case if I was using my Limited company back in 2013-2016, using my allowance and give myself dividends instead of paying NI on the full amount.
Furthermore, I believe that HMRC will come back asking me to pay tax & NI on the remaining overdrawn capital account balance.

I tried before to seek advice and I spoke to two different accountants that suppose they were dealing with similar cases. Both of them told me that overdrawn capital accounts are basically loans and they were trying to charge me £2500 and £4000 to calculate my outstanding tax and pay it back to HMRC.
At the time, I was a bit sceptical if that was a sincere advice or they just wanted to get thejob and make some money.

Did anybody have had independent professional advice on the issue?

Is it a group to join to discuss the issue in more details and take a collective action?

Thanks

[Telco7676]

I agree that why would HMRC stop at profit share figure and not capital payments? If the view is that this was a repayable loan and it was now 'fully' offset by now declaring a lower profit share number then is there not a taxable gain that needs to be accounted for?

Also, I suspect like many we received offers to join the partnership based on receiving payments that were net of tax and any further tax requirements would be settled by the LLP based on what they were retaining. If so now the request to declare profit shares is not what was communicated or agreed at the time so it was fraud?

If the LLP was accumulating a partner capital balance then where have they accounted for the payments they received from LTD companies that the partners were requested to be directors of? They must have asset and liability entries?

Hi,
I also received in the past 2 years multiple letters from HMRC questioning my income and the money I received from the partnership.
Two weeks ago, I received a letter from GlenMay about profits much higher than expected that will be allocated to my overdrawn capital account.
My understanding so far is that now I have to pay tax & NI on the profit share on the higher rate, which wouldn't have been the case if I was using my Limited company back in 2013-2016, using my allowance and give myself dividends instead of paying NI on the full amount.
Furthermore, I believe that HMRC will come back asking me to pay tax & NI on the remaining overdrawn capital account balance.

I tried before to seek advice and I spoke to two different accountants that suppose they were dealing with similar cases. Both of them told me that overdrawn capital accounts are basically loans and they were trying to charge me £2500 and £4000 to calculate my outstanding tax and pay it back to HMRC.
At the time, I was a bit sceptical if that was a sincere advice or they just wanted to get thejob and make some money.

Did anybody have had independent professional advice on the issue?

Is it a group to join to discuss the issue in more details and take a collective action?

Thanks