Archive for June, 2018

Crackdown on abuse of UK businesses

Wednesday, June 6th, 2018

Reforms are being considered that will ensure that Scottish Limited Partnerships continue to be used as a legitimate vehicle for investment in the UK.

Measures to crack down on the abuse of a specialised financial arrangement to launder foreign money through the UK was unveiled at the end of April 2018. This is part of a package of government reforms.

Scottish Limited Partnerships (SLPs) and Limited Partnerships (LPs) are used by thousands of legitimate British businesses, particularly the private equity and pensions industry, to invest more than £30 billion a year in the UK. SLPs and LPs are business entities created by two or more partners where at least one partner is liable for what they invest.

However, evidence published shows the growing evidence that SLPs have been exploited in complex money laundering schemes, including one which involved using over 100 SLPs to move up to $80 billion out of Russia. They have also been linked to international criminal networks in Eastern Europe and other locations and have allegedly been used in arms deals.

Figures published, as part of the launch of the government consultation on this issue, show that just 5 frontmen were responsible for over half of 6,800 SLPs registered between January 2016 and mid-May 2017. By June 2017, 17,000 SLPs, over half of all SLPs, were registered at just 10 addresses.

New proposals would make it clearer who runs limited partnerships to enable British investors to continue to use them legitimately and invest in the UK, while cracking down on their use in unlawful activities. These include:

  • Requiring a real connection to the UK, including ensuring SLPs do business or maintain a service address in Scotland.
  • Registering new SLPs through a company formation agent, this will ensure that frontmen will be subjected to anti-money laundering checks.
  • New powers for Companies House to remove limited partnerships from the company register if they are dissolved or are no longer operating.

The reforms being proposed will apply to all limited partnerships in the UK and will also include new annual reporting requirements for limited partnerships in England and Wales and Northern Ireland, all of which will help Companies House ensure they comply with the law.

Last year, the government introduced laws requiring SLPs to report their beneficial owner and make their ownership structure more transparent, this resulted in an 80% reduction in the number of SLPs registered. Recent, additional reforms seek to raise standards further.

Thousands receive back pay

Wednesday, June 6th, 2018

In a recent press release, HMRC urged underpaid workers to complain as figures show that the number of workers getting the money they’re owed by employers has doubled after interventions by HMRC.

According to latest figures, in 2017-18, HMRC investigators identified £15.6 million in pay owed to more than a record 200,000 of the UK’s lowest paid workers.

HMRC launched its online complaints service in January 2017, and this has contributed to the 132% increase in the number of complaints received over the last year and the amount of money HMRC has been able to recoup for those unfairly underpaid.

The figures are published as the government launches its annual advertising campaign designed to encourage workers to act if they are not receiving the National Living Wage or the National Minimum Wage.

Industries most affected include restaurants, bars, hotels and hairdressing.

Further information:

  • People not receiving at least the minimum wage can fill in an online pay and work rights complaints form.
  • It is the responsibility of employers, no matter how big or small, to pay the correct wage to their staff, and failing to do so can result in fines of 200% of the arrears, public naming and, for the worst offences, criminal prosecution.

From 1 April 2018, the government’s National Living Wage rate increased by 33p to £7.83 per hour for those aged 25 and over.

The National Minimum Wage increased:

  • by 33p to £7.38 per hour for those aged 21 to 24;
  • by 30p to £5.90 per hour for those aged 18 to 20;
  • by 15p to £4.20 per hour for those aged 16 to 17;
  • by 20p to £3.70 per hour for apprentices.

Premium rate fraudsters

Tuesday, June 5th, 2018

There seems to be an endless growth in illegal sites who aim to make money by claiming to be associated with HMRC.

The Government announced recently that it had scuppered one of these schemes.

According to HMRC:

Scammers create websites that look similar to HMRC’s official site and then direct the public to call numbers with extortionate costs in comparison to the low cost and no cost service HMRC provides. These sites promote non-HMRC premium rate phone numbers as a means of reaching HMRC, but these are merely call forwarding services which connect callers to HMRC at a significant price. HMRC’s own 0300 numbers are mostly free or charged at the national landline rate.

In other cases, sites charge for forwarding information to HMRC which can be provided free of charge through hmrc.gov.uk.

Hapless taxpayers caught by these websites will find themselves with hefty phone costs for being routed to “free” HMRC helplines. The specific tactics and costs on each site vary, but the maximum cost of a call is £3.60 a minute, capped at £36 per call. Anecdotal reports show the average victim reporting a cost of around £15 per call.

 

To counter this activity, HMRC has successfully challenged the ownership of these websites, masquerading as official websites, and taken them out of the hands of cheats. Analysis has shown that had HMRC not taken this action then the public would have lost £2.4m to these phone scams.

This announcement comes at the start of scam awareness month organised by Citizens Advice which is running throughout June 2018. In 2017, HMRC took a formal approach to denying others ownership of misleading domains, so far 105 domains have been recovered which were being used to host a range of misleading content.

Readers who need to contact HMRC can find the official contact numbers at https://www.gov.uk/contact-hmrc.

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