Pembroke PAYE Umbrella closing down

[webberg]

Probably. It certainly looks contrived to sidestep the LC.

Was it available pre loan charge or after?

[DealorNoDeal]

Was it available pre loan charge or after?

2017/18 is the earliest year mentioned here.

If it was around pre-LC then it may have "evolved". I imagine the LC has forced quite a few schemes to get "creative".

[Ian Richardson GT Leeds]

Was it available pre loan charge or after?

Incorporated August 2013

PEMBROKE PAYMENT SERVICES LIMITED - Overview (free company information from Companies House)

[webberg]

Thank you Ian.

From the filed accounts it's difficult to say whether they were active pre March 2016 or not.

If not, then the arrangements they claimed to have adopted (I have no evidence for or against the claims) which saw loans made directly by the company to employees, would - in theory - be outside section 554A ITEPA.

Therefore as the loan charge relies on that section, they would be be outside the loan charge.

As mentioned above, Pembroke would have had to move the loans out of the company in a manner consistent with it being a business expense, if it were to avoid a CT charge.

I need to look at later filings but I can see two routes open to HMRC to claim a large tax bill.

One would be to deny the CT relief, leading to a CT bill.

The other is to claim that the loans are "remuneration" in accordance with section 62 ITEPA and therefore PAYE/NIC is due.

Or both. (Although a successful claim for the latter would eliminate the former).

We look after some clients who have used something similar that has come to the attention of HMRC. The enquiries have not really progressed much with HMRC preferring I think to go down the liquidation route as a means of collecting money, rather than apply themselves to the requirements of TMA 1970.

The indeterminate position of the ownership of the loans is not helpful.

I suspect that the liquidator is seeing these as company assets that he is able to take action on to recover money to pay creditors. That may well be correct. I have insufficient information and/or lack the legal knowledge to claim otherwise.

It may be the case that a transfer has taken place and that some other entity has legal and beneficial ownership of the loans in which case the liquidator would be unable to claim them. I refer you to my caveat above regarding lack of information/knowledge.

For us, investigating the scheme and its workings is relatively straightforward providing we have enough data from clients.

Going beyond that and launching some form of appeal against a CT/PAYE assessment on the company and therefore seeking to defend individuals from personal tax bills (see above for a suggestion that some may have already paid) is a far more intense and costly exercise.

Another step beyond that would be to challenge the right of the liquidator to collect what he thinks are company assets. That is outside our competence and would require a multi disciplinary approach involving tax, insolvency, legal resources. All the while trying to fend off HMRC who probably have little idea as to the correct tax analysis, but see an opportunity to collect money with the minimum of (tax) effort.

Expensive.

That means that a handful of people wishing to enter the arena here need to understand that the costs may be considerable. Perhaps less than the tax due personally and/or the loan outstanding, but nonetheless a cost they did not anticipate. Where the tipping point comes for each person will be a subjective matter.

A mess frankly and one that in a perfect world would be with the previous owners/directors to resolve - at their cost - but which I suspect they will not as the authorities here have identified users as the weak link and bets option to collect money from.

It's a scandal that this has happened and there is no doubt going to be a lot of time and energy wasted on saying this.

The situation is however as it is. we have to deal with the facts before us and worry not about the moral or ethical cowardice shown by those who created this situation and then walked away.

[AnthonyB]

Thank you Ian.

That means that a handful of people wishing to enter the arena here need to understand that the costs may be considerable. Perhaps less than the tax due personally and/or the loan outstanding, but nonetheless a cost they did not anticipate. Where the tipping point comes for each person will be a subjective matter.

A mess frankly and one that in a perfect world would be with the previous owners/directors to resolve - at their cost - but which I suspect they will not as the authorities here have identified users as the weak link and bets option to collect money from.

It's a scandal that this has happened and there is no doubt going to be a lot of time and energy wasted on saying this.

The situation is however as it is. we have to deal with the facts before us and worry not about the moral or ethical cowardice shown by those who created this situation and then walked away.

Thanks for all your analysis here, it's very helpful and insightful. I will continue to push back and once I am given an ultimatum I will speak to you in order to better understand my options.

In the meantime HMRC have been unable to sort out problems with my online portal and have not sent me a paper form so this has still not happened.

I plan to disclose the fact that I had loans, but not the amounts. As I say, if they come back with questions and request payment I will then get in touch.

Thanks again,

[webberg]

Thanks for all your analysis here, it's very helpful and insightful. I will continue to push back and once I am given an ultimatum I will speak to you in order to better understand my options.

Don't wait too late.

In the meantime HMRC have been unable to sort out problems with my online portal and have not sent me a paper form so this has still not happened.

I plan to disclose the fact that I had loans, but not the amounts.

I would say that is likely to be the worst of all worlds. Either disclose fully or don't. A half way house leaves you nowhere.

As I say, if they come back with questions and request payment I will then get in touch.

Thanks again,

See above

[AnthonyB]

See above

I suppose my thoughts are if I say I had a loan of X amount it's easy for them to ignore the rest and just ask for the tax to be paid.

If I don't tell them the amount but give them the situation surrounding the loan they have to actively ask for the amount and I'd assume they would consider whether it was worth it or not at that time.

I'm also keen to delay it as I have no savings as I was out if work for about 18months and have a substantial debt. I am also hopeful the the loan charge and or Pembroke will come to a resolution through someone else's action that I can learn from but not sure if that's a good idea or not... The only people I've spoken to so far have just paid up.

[DealorNoDeal]

I suppose my thoughts are if I say I had a loan of X amount it's easy for them to ignore the rest and just ask for the tax to be paid.

If I don't tell them the amount but give them the situation surrounding the loan they have to actively ask for the amount and I'd assume they would consider whether it was worth it or not at that time.

I'm also keen to delay it as I have no savings as I was out if work for about 18months and have a substantial debt. I am also hopeful the the loan charge and or Pembroke will come to a resolution through someone else's action that I can learn from but not sure if that's a good idea or not... The only people I've spoken to so far have just paid up.

It should be safe to do this, this month. You've got until September to declare loans for the LC anyway.

No harm in sucking and seeing.

[dammit chloe]

No harm in sucking and seeing.

That's what she said!

[AnthonyB]

That's what she said!

That's what Pembroke said!...