Issues with 'Tax Efficient' PAYE Umbrellas Issues with 'Tax Efficient' PAYE Umbrellas
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  1. #1

    Some things in Moderation

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    Default Issues with 'Tax Efficient' PAYE Umbrellas

    The first thing to say is that they ARE NOT PAYE Umbrellas*, they only say that to get you to sign on the dotted line.

    If they say they are 'tax efficient' it means that they are tax-avoidance Loan Schemes of one kind or other.

    Be aware that these companies' business model is to lure punters in, cream off their payments for a year or two then close down the company, often through liquidation.

    This has two consequences:
    1. HMRC will come after you for the (PAYE) tax that you haven't paid.
    2. The Liquidator will come after you for the loan that the Umbrella provided to you.

    ...and a third consequence - just before they liquidate, the sharks sell the loans onto bigger sharks who will come demanding that you pay the loans back.

    The end result is you lose your 'earned income' and HMRC still expect you to pay the tax on it.

    Note I have NOT put quotes around loan, I have around 'earned income'. That's because you entered into a legal loan arrangement without your knowledge and the courts can make you pay it back.

    But these Loan Sharks (for that’s what they are) want to hide the fact that you're signing a loan agreement, because if you knew you wouldn't sign it.

    So if the contract you are about to sign has:
    • "advance on salary secured against future earnings"
    • advanced salary payments
    • deferred payments
    • a salary portion
    • Growth Shares Payments
    • anything in front of the word payment or salary.

    These are weasily alternative phrases for the word LOAN.

    Don't sign it. Ask for help here or look at this thread - Choosing a legitimate umbrella

    Oh, and sharks just love large contracts, we’ve seen them 20+ pages in length. If a contract is more than 10 pages long you can bet your sweet patootie that the sharks are trying to hide something in there.

    If you have signed it and someone is demanding that you pay the loan back, you may need insolvency help. Go with an insolvency practitioner NOT recommended by the ghouls who initially contacted you about repayment, there are reputable ones out there. And have a look at this thread Loans being demanded - a summary.

    *Genuine PAYE umbrella companies pay their employees 100% through PAYE (payslip).

    Edit: and make sure that they have a website with proper company information contained in it, so that you know who you are dealing with - all reputable umbrellas will have one! (I can't believe I have to post this one, but there you are...)
    "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...

  2. #2

    Nervous Newbie


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    Default More help needed - Pace Pay Umbrella

    Hey Cojak, I've jumped back on here as a new contract means I've got to find a new umbrella and that means the worries start again! Your post caught my eye and you was very helpful last time around. So issue is new agency has new list of umbrellas to choose from (oh joy!) and Pace Pay is being pushed on me as its with Professional Passport. So with knowledge gained on here and not taking anything as a safe easy option ive done some digging and Pace pay is based in Malta which seemed a strange place so more digging brought up that if in Malta they are only there cos to do dodgey tax avoidance. Can you or anyone help me with info on Pace Pay and it being from Malta? Cant afford to miss the chance with new contract but dont want to be stung by HMRC! Cheers.

  3. #3

    Some things in Moderation

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    Quote Originally Posted by Pturner View Post
    Hey Cojak, I've jumped back on here as a new contract means I've got to find a new umbrella and that means the worries start again! Your post caught my eye and you was very helpful last time around. So issue is new agency has new list of umbrellas to choose from (oh joy!) and Pace Pay is being pushed on me as its with Professional Passport. So with knowledge gained on here and not taking anything as a safe easy option ive done some digging and Pace pay is based in Malta which seemed a strange place so more digging brought up that if in Malta they are only there cos to do dodgey tax avoidance. Can you or anyone help me with info on Pace Pay and it being from Malta? Cant afford to miss the chance with new contract but dont want to be stung by HMRC! Cheers.
    The agent is pushing it because of the big commission they'll get if they sign you up.

    Just go with one of the other umbrellas. There must be one on the list that isn't dodgy.
    "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...

  4. #4

    bored now

    eek's Avatar
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    As I've said before and I will say again Professional Passport's list of umbrellas contains some of the dodgiest firms I've seen in years and it's not a great list for other options if that is who you need to choice from - if you have to pick one I've heard of Contractor Co-op (as they used to occasionally post on here) and don't remember seeing flaws in their offering


    It's worth reading Tackling promoters of mass-marketed tax avoidance schemes - GOV.UK but I can't find on it the bit I was looking for - which is the act covering promoting of schemes as that is the bit that makes the agency liable...

    Seperately the "Case study on the use of real time information" is useful for others to understand what HMRC are doing - it's worth noting that just using a known scheme for a month is enough to trigger an investigation...
    Last edited by eek; 25th August 2020 at 06:54.
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  5. #5

    bored now

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    Quote Originally Posted by cojak View Post
    The agent is pushing it because of the big commission they'll get if they sign you up.

    Just go with one of the other umbrellas. There must be one on the list that isn't dodgy.
    See my post below - the professional passport list has about 1 umbrella I recognise - I would love to see how many Lucy does but I suspect her list won't be much longer.
    merely at clientco for the entertainment

  6. #6

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    Quote Originally Posted by eek View Post
    See my post below - the professional passport list has about 1 umbrella I recognise - I would love to see how many Lucy does but I suspect her list won't be much longer.
    There are only a few on there who have been around for a while, but if you want my vote on any of them I would suggest the team at iPaye, I've known a few of the team there for a while and they were very proactive when we had the AUCAE members meetings.

  7. #7

    bored now

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    Quote Originally Posted by lucyclarityumbrella View Post
    There are only a few on there who have been around for a while, but if you want my vote on any of them I would suggest the team at iPaye, I've known a few of the team there for a while and they were very proactive when we had the AUCAE members meetings.
    Thanks for that - I forget ipaye was on the list and I know Sue is trustworthy.
    merely at clientco for the entertainment

  8. #8

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    Thanks guys. It looks like professional passport isnt rated very highly by you guys at all!!! The Contractor Coop isn't on the list ive been given. Can i tell the agency I want to use them even though they've said I can't use the umbrella I'am using now? The others on the list are Dark Blue, Hero and Amaze. Can anyone recommend any of these?

  9. #9

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    Quote Originally Posted by Pturner View Post
    The others on the list are Dark Blue, Hero and Amaze. Can anyone recommend any of these?
    To be honest never heard of any of them Dark Blue and Hero seem to have linked Directors, so may be connected somehow. As I always say, the best thing to do is to pick up the phone to them and make sure you can get all the answers you need

  10. #10

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    Quote Originally Posted by lucyclarityumbrella View Post
    To be honest never heard of any of them Dark Blue and Hero seem to have linked Directors, so may be connected somehow. As I always say, the best thing to do is to pick up the phone to them and make sure you can get all the answers you need
    This https://www.contractoruk.com/forums/...ngement-2.html shows up as my second result when searching for Dark Blue..

    So that leaves Amaze who are FCSA registered (so should be legit as my FCSA dislikes have little to do with tax avoidance more the fact they are f***ing clueless about what they need to do to clean up this mess of an industry).
    Last edited by eek; 25th August 2020 at 10:44.
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