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I worked as a contractor in the UK for the tax year 2008/2009

Customer Question

I worked as a contractor in the UK for the tax year 2008/2009 and my salary was handled by an 'umbrella company' in the Isle of Man who, HMRC now tell me was non-compliant.
Do I have any redress?
They've changed theirname and a letter I sent to them came back as 'undeliverable, address unknown'.
Submitted: 3 years ago.
Category: Tax
Expert:  Nicola-mod replied 3 years ago.
Hello,

I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.

I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.

Thank you!
Nicola
Customer: replied 3 years ago.

It all started back in March when I received a sudden tax bill for over £26,00.00 on my work in 2008/2009.
I put it all in the hands of my accountant along with all the info I could come up with. Unfortunately most of my records for that tax year are unvalable.


After a number of letters to and from HMRC I agreed that my wife would act as my agent and she telephoned HMRC, (I do not hear too well anymore).


It transpired that the company on the IoM were not compliant with IR Regulations with the way they operated their salary schemes. They had approached HMRC about these schemes and were told that they were illegal so there are 2 points here I believe and 1) is why were the particular company allowed continue with their schemes and 2) didn't HMRC have a responsibility towards me, the taxpayer?


The company involved were the Sanzar Partnership, who told me that I would be paid via a 'Profit Sharing Scheme' for 2008, and then changed their name to Sanzar Solutions for 2009 and that I would now be paid under a 'Preferential Loan Scheme'.


Sanzar Solutions subsequently changed their name to 'Innocous in June 2011. A letter to them came back as 'undeliverable, address unknown', I'd obtained that from the IoM Company's Registry. Similarly, an attempt to contact SAReturns (e-mail and who I believed did my tax return for 2008/2009) came back as 'undeliverable'.


Please advise if you require more information


 

Expert:  Nicola-mod replied 3 years ago.
Hello,

We will continue to look for a Professional to assist you.

Thank you for your patience,
Nicola
Expert:  Sam replied 3 years ago.

Hi

 

Thanks for your question which I have been asked to look at

 

I am afraid your only redress is through legal channels, however many of these umbrella schemes operated under the guise of what they believed to be compliant with HMRC regulations, which transpired, were clearly not.

Your other issue is this company seem to no longer be operating (if the email has been returned as undeliverable) but I would still urge you to engage an initial consultation with a legal expert in tax, to see if they would be willing to take on your case, but I fear (and this is my honest opinion) that it would be throwing good money after bad.

 

All you can do is negotiate with HMRC as to the payments being asked for, ensure they are assessing you on the right amounts, and make arrangements to pay, if you are unable to suffer the full cost in one payment.

 

As for your questions

1) Why was this particular company allowed continue with their schemes

Answer

They were not allowed to continue, as soon as HMRC identified, and reviewed the schemes, and determined they were not being operated correctly, they contacted all participants to advise them, by assessing the taxes they found to be due - but you also need to ask, what company when advised they are not set up to legally to avoid tax, would have the lack of morals to continue to offer this to individuals

And clearly the company did not pass on this information, or declare themselves to HMRC, and clearly are baling out now when its participants need them to support them

2) If you knew the scheme was illegal, or had worries about the legitimacy, then HMRC will state that you should have contacted HMRC yourself for clarification, but one has to assume you were attracted by the tax savings to made, and were happy to benefit from this, so HMRC will argue that you had a duty of care, to ensure you were being taxed correctly, and they will state that you knowing entered an arrangement, that offered avoidance of tax (whether you thought this was legal at the time or not)

 

But you have to remember, that you have had income that was paid tax free incorrectly, and HMRC are only asking form you, what you failed to pay (and should have paid) at the time, and I am very sorry to hear that you have been caught in the crossfire, between what you had been led to believe, and what was actually the law.

 

Thanks


Sam

 

 

 

and 2) didn't HMRC have a responsibility towards me, the taxpayer?

 

 

Expert:  Nicola-mod replied 3 years ago.
Hello,

Just a quick reminder, there is an unrated answer waiting for you here from the Professional.

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Thank you,
Nicola

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