Loan Schemes and Withheld Income

[webberg]

That LinkedIn post was me again, I’m on a roll!

I do think it’s an outright fraud, and am happy to chat, but this is what I have seen.

When I contact the umbrella companies and request they either make good the underpaid PAYE, or repay the worker, they have bribed workers by offering to file a tax return for free and give them a small payout. In spite of everything, it has been accepted by most, even though in my opinion, that’s just short term gain, long term pain.

Those who go forward with a claim can go the civil route, which is costly, or try the ET route, but two claims I’ve provided evidence for, have been shelved by the ET for over a year, with no explanation.

It’s hard to know what advice to give, but the starting place is to check whether this has actually happened, because of the potential defence when it comes to HMRC.

If this is correct then there is a case for the bodies authorising umbrellas (FCSA, PP, etc) and perhaps IPSE who claim a more general mandate to look after contractors, to "name and shame".

I'm not holding my breath on that one.

I agree that each user of such a scheme needs to do a very simple - follow the money - exercise in order to find out what is happening.

If the umbrella is reluctant to engage in that exercise, then that in itself tells a story and is a reason to leave.

[cwcsolutions]

I reported the FCSA members who were under investigation to Julia Kermode, and the day ones that that I had noticed were loan scheme providers in disguise. All were associate members, i.e.blue logo, and in 1st October last year associate memberships were withdrawn; a bit too late for people who thought it meant something.

It’s difficult to name and shame, I’ve been threatened with defamation to make me back off when I warned the agencies using a particular company to save other agency workers who were unaware of the issue. I just copied HMRC investigators into my replies to the solicitor until they stopped harassing me, but I know from experience that no organisation will stick its neck out on this.

HMRC is quicker off the mark now, they’re already looking at schemes that operated in 2017/18 and are approaching users, so if there has been fraud perpetrated against the taxpayer by the so called umbrella company, perhaps people will get together to share the cost of action. However, next year HMRC is second preferential creditor in liquidations, so would a judgement even be necessary for employees, who are the preferential creditor? I’m not sure, it’s just musing on my part.