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I have been tricked into a loan scheme

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    I have been tricked into a loan scheme

    Hi guys,

    After doing some thorough investigation I think I have been tricked by this Payroll Services company called BCSL Browning Contractor Services (CY) Limited to commit what is called disguised remunaration. I called them and they explained half of the company is in Cyprus and half in the UK and initially when I started I didn't know much about UK's tax system and because they said they had a UK presence in the I thought they are ok legally. The staff is British and when I talk to them on the phone, they seem to have offices as there's noise in the background etc.

    However, I realised that my limited company -> pays an invoice BCSL Browning Contractor Services (CY) Limited raises against my company -> then they pay me in my personal account. I asked them many times if this is legal and they said those are grants and everything is ok. I have always paid the corporation tax and everything I got from HMRC on time.

    I started trading in Dec 2017 so I have 2 fiscal years so far:

    2017-2018
    2018-2019

    I have called my accountant to redo the Self Assesment Tax Return for both years and include these grants as taxable income. Now because of her negligence, she didn't do the SATR on time for 2017-2018 and it was submitted this month.

    What kind of penalties am I expecting? Has anyone has gone through something like this before?

    The grants value is under 30k for 2017-2018 and under 50k for 2018-2019. I have reported to HMRC my situation and I think they will open an investigation. Can BCSL Browning Contractor Services (CY) Limited be brought into this legally as they have misled me into potentially breaking the law? I don't have money to pay a lawyer... and I'm afraid I won't be able to pay the HMRC bill... Should I go for bankruptcy? I have reported them to HMRC already.

    #2
    Someone else in the same boat. Possibly. https://www.contractoruk.com/forums/...ml#post2695485

    You'll have to pay interest and the tax owed. I think it is unlikely there will be any penalties applied. You should appoint a new knowledgeable accountant to deal with HMRC. On no account deal with them yourself.

    Regarding being tricked - what was it that convinced you to use them?
    Down with racism. Long live miscegenation!

    Comment


      #3
      Originally posted by NotAllThere View Post
      Someone else in the same boat. Possibly. https://www.contractoruk.com/forums/...ml#post2695485

      You'll have to pay interest and the tax owed. I think it is unlikely there will be any penalties applied. You should appoint a new knowledgeable accountant to deal with HMRC. On no account deal with them yourself.

      Regarding being tricked - what was it that convinced you to use them?

      They said they would set up the company for me and they will manage everything for me (tax-wise). They never said they were using such scheme and I never knew about it since it was the first time I was contracting. I also have an accountancy company CompleteAccounting which I use and pay for (and they are based in the UK). They are the ones who should have told me if something was wrong but they didn't which makes me very angry... Can't sue them because I have no such money ...

      Comment


        #4
        Do you have a copy of any paperwork you signed (even if digitally)? What led you to selecting this company?

        Reporting BCSL them to HMRC will do nothing - they don't care about anything except getting their money.

        Have HMRC contacted you, asking you whether you involved in any avoidance scheme? ie. Are you part of the Loan Charge fiasco? If so, what steps have you taken to date? And, if so, have you read the very helpful threads on this board?

        The good news might be that your 2018-19 SATR is not due till end January, so, assuming you have funds (and assuming you've not just ignored any Loan Charge or other HMRC letters), you should be able to sort things out easily for that tax year. But, if you've gone against all recommendations and spent it all, then that's another issue.
        Last edited by Paralytic; 10 November 2019, 13:10.

        Comment


          #5
          Originally posted by Paralytic View Post
          Do you have a copy of any paperwork you signed (even if digitally)? What led you to selecting this company?

          Reporting BCSL them to HMRC will do nothing - they don't care about anything except getting their money.

          Have HMRC contacted you, asking you whether you involved in any avoidance scheme? ie. Are you part of the Loan Charge fiasco? If so, what steps have you taken to date? And, if so, have you read the very helpful threads on this board?

          The good news might be that your 2018-19 SATR is not due till end January, so, assuming you have funds (and assuming you've not just ignored any Loan Charge or other HMRC letters), you should be able to sort things out easily for that tax year. But, if you've gone against all recommendations and spent it all, then that's another issue.

          BCSL advertised themselves just like any other services out there. That's how I found them talked to them and I wasn't in the UK at the time so I trusted them to be operating legally and not mislead clients. HMRC hasn't contacted me I did report this to them because I want to be legal and fully compliant. Also you say HMRC will do nothing to BCSL but how are they legally able to operate then? The staff is British... I don't get it. Technically I can setup then a similar company, trick my clients and involve them in these schemes and when things go down I walk away free of jail/penalty? How is this possible ? I wasn't born in the UK to know the laws that's why I paid for "professional services" to help me out.

          I've contacted the accountant to redo both SATR 2017-2018 and SATR 2018-2019 and declare these grants. I keep chasing her on these things. She tells me grants are not taxable but I doubt...
          Last edited by Tavy; 10 November 2019, 13:18.

          Comment


            #6
            Originally posted by Tavy View Post
            BCSL advertised themselves just like any other services out there. That's how I found them talked to them and I wasn't in the UK at the time so I trusted them to be operating legally and not mislead clients. HMRC hasn't contacted me I did report this to them because I want to be legal and fully compliant. Also you say HMRC will do nothing to BCSL but how are they legally able to operate then? The staff is British... I don't get it. Technically I can setup then a similar company, trick my clients and involve them in these schemes and when things go down I walk away free of jail/penalty? How is this possible ? I wasn't born in the UK to know the laws that's why I paid for "professional services" to help me out.
            I'm afraid it doesn't matter if the staff are British or from Timbuktu - they are a Cyprus based company.

            It is very hard to prove companies such as this are doing anything illegal (if they are) - in the eyes of the law, its up to each individual to ensure their tax affairs are legal in the UK.

            You say you can't afford a lawyer - without one, I doubt you'll get far and will just have to work something out with HMRC.

            Comment


              #7
              Change your accountant. You need someone who understands that just saying something is a grant doesn't mean that it is a grant. Sorry, I have no recommendations.
              Down with racism. Long live miscegenation!

              Comment


                #8
                Originally posted by Paralytic View Post
                I'm afraid it doesn't matter if the staff are British or from Timbuktu - they are a Cyprus based company.

                It is very hard to prove companies such as this are doing anything illegal (if they are) - in the eyes of the law, its up to each individual to ensure their tax affairs are legal in the UK.

                You say you can't afford a lawyer - without one, I doubt you'll get far and will just have to work something out with HMRC.
                But the bank they use is Barclays and it's in the UK?

                Comment


                  #9
                  Originally posted by NotAllThere View Post
                  You should appoint a new knowledgeable accountant to deal with HMRC. On no account deal with them yourself.
                  This.

                  Comment


                    #10
                    Originally posted by Tavy View Post
                    But the bank they use is Barclays and it's in the UK?
                    And?
                    "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
                    - Voltaire/Benjamin Franklin/Anne Frank...

                    Comment

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