Letter from HMRC about umbrella company used in the past Letter from HMRC about umbrella company used in the past
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  1. #1

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    Default Letter from HMRC about umbrella company used in the past

    Hi All,

    I’m here looking for help or recommendations on where to go. I’m posting on behalf of my sister, who’s been working for agency nurses.

    She received a letter from HMRC about an umbrella company she used in 2017.

    The letter headlined, you may have been involved in tax avoidance!
    Were writing to you about the employment arrangement you had with Mercy Global consult Ltd.
    you may not have realised this but those arrangements could be tax avoidance. When you signed up to them the possible tax consequences may not have been clear to you.

    If those arrangements are tax avoidance, you may not have had the right amount of tax and national insurance contributions deducted from your earnings. So, you could end up having to pay more tax and national insurance contributions you can find out more about this in the section called, the risks of using tax avoidance arrangements later in this letter.

    Letting you know so you can make sure you do not use tax avoidance in the future. We take action to challenge those who promote tax avoidance arrangements. We are equally committed to helping people make sure they do not use tax avoidance arrangements in the first place. This letter tells you about tax avoidance and how to spot it.

    There are 6 pages in total. She worked for them for about 1 month and changed umbrella companies. All umbrellas where recommended and had to be used to commence work.

    I’ve always told her to for a company but she was adamant that the agencies wouldn’t allow it, now she’s in trouble.

    I’m reading horror stories and wondered, what she should do.

    Having called up the company, they’re saying it’s HMRC phishing and to do nothing but they’d say that, won’t they?

    Please comment if you know more.

    Thanks

  2. #2

    Some things in Moderation

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    The bad news is that you are right - agencies get huge commissions to push these dodgy umbrellas and the company will say anything to get you not to speak to HMRC.

    The good news is that your sister was only in it for one month, so she should be able to pay off the tax debt with HMRC.

    Other posters will be able to explain better and in more detail, so read what they have to say.

    But you MUST get your sister to check her current umbrella company to make sure that it IS legitimate.
    "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."
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  3. #3

    bored now

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    Quote Originally Posted by cojak View Post

    But you MUST get your sister to check her current umbrella company to make sure that it IS legitimate.
    +1 - if an agency is using 1 dodgy umbrella chances are all the ones on the list are dodgy (we've seen it here even umbrellas that pass what the industry claim are their checks)..
    merely at clientco for the entertainment

  4. #4

    More fingers than teeth

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    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.

  5. #5

    Some things in Moderation

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    And here's a post setting out what to do.

    https://www.contractoruk.com/forums/...-umbrella.html

    Basically - get out of the umbrella and settle with HMRC.

    But don't expect to get any money back from any dodgy umbrella - they make sure of that.
    "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."
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  6. #6

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    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.
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  7. #7

    Some things in Moderation

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    Quote Originally Posted by webberg View Post
    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.
    Sorry, my mistake.

    I shouldn't be shocked at this, should I...
    "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."
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  8. #8

    Should post faster


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    Also make sure your sister received her wage as a single PAYE payment for her services, and it wasn't a case of receiving it across multiple payments, one PAYE and another one which is claimed to be something else.

  9. #9

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    The poor grammar on their website makes me distrust them.

    Qualified Compliance Experts

    We are not like every umbrella services companies that allows their staff to perform all service sectors, but an umbrella company that have experts fully compliance with HMRC regulations.
    Services – MERCY GLOBAL CONSULT

    No claims of high retention of pay, but no quote service and the overly repeated claims (across many pages) of HMRC, regulatory 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.
    Last edited by Paralytic; 18th November 2020 at 14:52.

  10. #10

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    Quote Originally Posted by Paralytic View Post
    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.
    They do claim affiliate status with Apsco so it might be worth a call to them?
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