Disqualified umbrella company director Adrian Sacco ‘got a mere slap on the wrist’

The dust settling on Adrian Sacco’s director-ban isn’t making contractors any more forgiving of him potentially leaving the public purse millions short, and them possibly “hung out to dry” with HMRC. 

At least, not most contractors it isn’t.

One ContractorUK reader, a former Microsoft contractor, says that given what the 55-year-old was actually accused of doing by the Insolvency Service, Mr Sacco’s eight-year ban looks ‘overly long’ considering accountant Darren Upton was banned for a much longer 14 years.

'It was all a sham'

But another contractor, an actual victim of Mr Sacco -- who has admitted failing his fiduciary duty as Best Employment Services’ (BES) director, says eight years disqualified is lenient.

The duped contractor told ContractorUK: “I was one of the unsuspecting contractors who entered into an agreement with Best Pay, which later changed its name to BES. Despite all the reassurances that their ‘legal’ team gave us, it was all a sham.

“[Because] as soon as BES went without any warning into liquidation, myself and other contractors got a…letter from HMRC saying…we'd operated under a disguised remuneration scheme. The mere slap on the wrist of eight years [for Mr Sacco] is [therefore] laughable [compared to the potential, combined HMRC consequences for us all].”

'More Loan Charge-type suicides'

Online, a LinkedIn user suggested that ‘consequences’ can come in different forms, as already seen eight times over by those caught by HMRC’s most notorious tax policy of 2016. 

The user posted: “All [the people]….with the [umbrella] company [BES] should come under suspicion, and HMRC [should] block [their] attempts to register for VAT, corporation tax and PAYE. Else [you] move [to] create more Loan Charge-type suicides.”

The Freelancer & Contractor Services Association says: “Many of these schemes have all the same hallmarks – offshore arrangements, loans instead of salary or dividend and, no doubt, an available-by-NDA-only QC’s opinion.”

'Don't touch these schemes with a bargepole'

The association also said contractors “should not touch these schemes with a bargepole,” regardless of “how reassuring their websites and marketing material” appears to be.

As to BES specifically, Chris Bryce, FCSA’s chief executive, is another who believes Mr Sacco’s director-disqualification term is too short.

“[We are] disappointed by the leniency of the eight-year ban imposed on the director of failed BES, Adrian Sacco,” Mr Bryce said in a statement to ContractorUK.

The statement continued: “It is clear that the company was operating sham schemes and yet again contractors are now at risk of facing a liability.

“FCSA believes that better policing of this kind of operation is urgently required, and that directors who run such sham schemes should be both criminally and civilly liable for the unpaid taxes.”

'Too good to be true'

Mr Bryce added that the FCSA “regularly reports” such “too-good-to-be-true” offers (BES touted 90% take-home pay), to the relevant authorities.

But one of those authorities, HMRC, is apparently not being given the information it needs to proceed against BES contractors.

“No figures were mentioned [in HMRC’s letter accusing us of being disguised remuneration users],” said the former BES employee.

“Since then we have had one or two more letters from HMRC, stating we should declare the loans on our self-assessment tax returns. But we're now subscribed members of the Loan Charge Action Group and upon their advice, [we] have not disclosed any figures or dates."

'Hung out to dry'

“But,” added the contractor with a sigh of resignation, “I guess we're still hung out to dry -- while Sacco gets off relatively scot-free.”

Another ContractorUK reader echoed this sense that Mr Sacco ‘got away with it.’ “Hopefully now nobody will go anywhere near him, or his…enterprises. But I’m amazed he did not get a lifetime ban,” the reader said. “What is wrong with the authorities.”