Letter from HMRC about umbrella company used in the past

[webberg]

MERCY GLOBAL CONSULT LTD. - Officers (free information from Companies House)

Lots of activity in the Directors' seats with a fair number of short term placements.

Not that such movement should be viewed as necessarily sinister.

[Taxissues]

For a very quick check, share the name of the umbrella your sister is using with us and you'll soon get a feel for what the collective think of them.

She’s used Ips contrywide and i4group currently, don’t know if others. I’ve asked her to look back.

[eek]

The poor grammar on their website makes me distrust them.



Services – MERCY GLOBAL CONSULT

No claims of high retention of pay, but no quote service and (IMO) and overly repeated claims (across many pages) of HMRC and statutory compliance (with no specific details) makes me very suspicious.

The do claim to be APSCo Affiliate members and Professional Passport Umbrella approved, but I doubt that should add any specific confidence that they are not dodgy.

We've definitely seen problems with Professional Passport in the past but the approach the other dodgy umbrellas used is excluded from the compliance statement at Compliance – MERCY GLOBAL CONSULT (as they don't list overseas work).

The one thing that compliance statement wouldn't cover is paying some money as an employee loan - which we've seen others use.

However Services – MERCY GLOBAL CONSULT may mean they are using the Mini Umbrella technique where they maximise use the the Employer NI and VAT regimes (mind you even though I've know about such things for 5 years it seems to have been a surprise to the supposed experts in this industry).

RECRUITMENT AGENCIES
Agency margins are improved using all of our employment solutions as the limited company will charge less for the candidate’s services than the equivalent agency payroll cost.

[Taxissues]

The letter is a template that HMRC appear to have issued thousands of.

It may be that the umbrella used did NOT run any form of tax avoidance scheme. Certainly we have seen examples of letters sent to people whose umbrella was legitimate.

So first, check the pay/tax ratio whilst at the alleged dodgy umbrella.

If your sister was a basic rate taxpayer then the tax/NIC should be around 75% of the gross rate.

Make sure that if there is a 25% or so deduction, that this was ALL tax/NIC and not mainly fees.

If the above ratios are roughly correct and verifiable (i.e. you have hard evidence of the tax being deducted), then there is probably not much in the HMRC letter to worry about.

So - check first, deal with HMRC second.

Can she seek your expert advice please? I’m so worried for her and so is she.

[eek]

She’s used Ips contrywide and i4group currently, don’t know if others. I’ve asked her to look back.

I4group seem fine although their explanations aren't much use - the fee one is badly explained beyond the fact it's a percentage that maximises at £28 a week. - something doesn't look right on further checks.

IPS gives me slightly more fears though as that director lives in the IoM and the number of companies he has is oh boy

And assuming you are talking about Income Plus Administration their calculator is promising the impossible - On £400 a day it claims to give you £1353.37 which is about £150 more than it should be.

[Paralytic]

Can she seek your expert advice please? I’m so worried for her and so is she.

Before getting any formal advice, she should just check her payslips to check what deductions have been made. In particular, what Tax and NI has been paid?

Post a summary of the payslips here (redacted personal details and amounts, of course) would allow others to help in this regard.

[Taxissues]

I4group seem fine although their explanations aren't much use - the fee one is badly explained beyond the fact it's a percentage that maximises at £28 a week.

IPS gives me slightly more fears though as that director lives in the IoM and the number of companies he has is oh boy...

She emailed me her updated contract with ips and it had loans, written all over the place, so she moved to i4group.

After getting this letter and googling, we see, this has been going on for so long and she was none the wiser.

[Taxissues]

Before getting any formal advice, she should just check her payslips to check what deductions have been made. In particular, what Tax and NI has been paid?

Post a summary of the payslips here (redacted personal details and amounts, of course) would allow others to help in this regard.

I’ll try and get copies

[webberg]

Can she seek your expert advice please? I’m so worried for her and so is she.

We offer a free 30 minute initial call.

Contact our main number and one of my colleagues will arrange a conversation.

Ask for a date/time with Graham

[eek]

We offer a free 30 minute initial call.

Contact our main number and one of my colleagues will arrange a conversation.

Ask for a date/time with Graham

Number is 020 3468 0000 as Graham didn't write it down.