The Court heard that Reed Umbrella Ltd had provided legal and invoicing services to the ‘Sunday Solutions Scheme’, a tax umbrella scheme that was later closed down by the Service’s Court action.
The services provided by Reed Umbrella Ltd comprised the checking of contracts between consultants in the scheme and their employers. Each time a consultant changed employer or the terms of employment, such as a change of hourly rate, the contract was checked and a charge levied by the company.
Reed Umbrella initially traded as Simpson Cooper and Associates, then as Sunday Solutions UK Ltd, expanding its activities to include invoicing services to consultants already in the tax scheme and to newly recruited consultants.
In the year to 30 April 2010 the company collected and processed some £21.4 million of earnings by consultants. Many of the 1500 or so consultants who used the service did not have their tax liabilities paid and remain liable for their unpaid tax.
Company Investigations Supervisor Chris Mayhew, who welcomed the ruling, reminded anyone considering using an umbrella tax scheme to ensure they used a reputable company:
He said:
“Reed Umbrella originally provided document verification services to the Sunday Solutions Scheme and from around February 2009 it also provided invoicing services to participants in the scheme.
The company’s turnover in the year to 30 April 2008 was just over half a £million but with the expansion into providing invoicing services the company then handled over £21 million but no annual or management accounts were prepared after those for the year to 30 April 2008.
Reed Umbrella’s provision of services to Sunday Solutions were essential to the continuance of the unscrupulous scheme which eventually failed with substantial losses to its participants. As set out in the Court’s judgement, the action taken means that Reed Umbrella’s affairs and its involvement in the scheme are properly examined and wound up in an orderly way”.
