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Gateway sunk by £400k VAT bill for Ucis commission

by Iain Martin on Mar 30, 2011 at 09:00

Gateway sunk by £400k VAT bill for Ucis commission

Gateway Consortiumwas pushed into liquidation by HM Revenue & Customs over a £400,000 unpaid VAT bill for commission it received for the marketing of unregulated collective investment schemes (Ucis) to advisers.

Gateway founder Clive Holmes (pictured) confirmed the business, which operated as a ‘club’ promoting investment opportunities to IFAs, had been pushed into liquidation by the bill although disputed whether commission was liable for VAT.

‘We had a VAT inspection, then three days later this woman turned up and said “I don’t agree [commission is exempt from VAT]”,’ said Holmes. ‘We said: “what is the precedent?” but what can you do? Our accountant said we can appeal but it could cost tens of thousands of pounds.’

‘If they did this to the other networks it would pull the lot of them down,’ said Holmes, after a winding up order was made against the business on 2 February.

37 comments so far. Why not have your say?

Phil Castle

Mar 30, 2011 at 09:41

The VAT treatment for commission is no different to the VAT treatment of fees. It is all about whether the predominant service is intermediation or not. Was it predominantly intermediation or NOT?

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Christopher Petrie

Mar 30, 2011 at 10:41

Hmmm. Is this the same Mr Holmes that was involved in the use of Whole of Life plans as an alternative to personal pensions for the Berkeley Network?

Allegedly that brought such compliance problems/recompense that it brought the whole Network down.

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Bob Wilson

Mar 30, 2011 at 11:45

Now coming to you from the Seychelles!

Never let a bit of bother with the taxman get on the way of a bit of business, eh Clive?

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Man in Black

Mar 30, 2011 at 13:33

Wow!! Is that the same Clive Holmes who helped Berkerly Berry Birch design their unique "You don't want a Stakeholder, you want a WoL/MIP instead" campaign?!?

I believe he was referred to as "the Consultant" in the FSA Notice: -

http://www.fsa.gov.uk/pubs/final/berkeley.pdf

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Man in Black

Mar 30, 2011 at 13:36

Sorry, I've just seen Chris Petrie's posting above. Nice to see its not just me who can remember these things.

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T Murphy

Mar 30, 2011 at 13:42

Clive Holmes seems to rely on his reputation of having been the leading salesperson at Abbey Life in the 1970's, to convince guillible advisers that he is a man with the midas touch, who will show them how to make a fortune. However, the only person who ever seems to end up making a fortune is Clive Holmes. For the other people involved it always appears to end in tears.

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michael rowley

Mar 30, 2011 at 14:39

Never let the truth get in the way of a good story, especially if the journalist recieves a fee for the piece...........!! Speak as you find is the maxim for those not jaundiced by other contributor`s rhetoric.

"Tie the thy troubles to thy saddlebow and ride forth merrily singing...Life...tis only a game.!"

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micky mouse

Mar 30, 2011 at 14:39

No more helicopters for Clive then? Just those red things that stop in the street called buses!

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Nick Young

Mar 30, 2011 at 14:43

Clive - time to retire. Please...

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Financialplanner2012

Mar 30, 2011 at 14:45

As Phil says, under the VAT Act, it is the nature of the service, rather than the nature of the remuneration which determines whether a supply is subject to VAT.

Now that HMRC is finally waking up to the erroneous dispensations previously allowed by Customs & Excise, it may only be a matter of time before HMRC starts demanding VAT on inherited trail commission received from clients who transfer existing policies.

If so, a number of long established IFAs should be very afraid .,.....

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Chris F

Mar 30, 2011 at 14:51

Not quite 100% relevent: I began my career in a bank with one of the (ex) senior people at BBB.

At the time, if we "sold" a bank product, we would stick a little sticker on the application form so our "sales" could be tallied in the back office (this is things like telephone banking back in 1988).

This chap, let's call him RH, used to go and put his stickers in the all of the blank leaflets to go in the banking hall and to be sent out. He was the "top seller" on the back of this, despite him never having spoken to many of the customers he was claiming to have "sold" to.

"Birds of a feather" as they say.

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Anitaki

Mar 30, 2011 at 14:51

A pig wearing lipstick is always a pig.

A chancer wearing a suit is always a chancer.

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Sam Caunt

Mar 30, 2011 at 15:03

Since when has marketing been an intermediary service?

But VAT is of concern to advisers generally as has been discussed elsewhere. What is frightening is the lack of understanding by many IFAs as to what are intermediary services and the lack of clarification and precedent examples from HMRC.

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Bob Wilson

Mar 30, 2011 at 15:05

NMA 16th November 2006. An inspirational bio-piece on Clive and Gateway, and well worth a read in hindsight.

An updated in-depth by Citywire is long overdue.

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Andy Gibbs

Mar 30, 2011 at 15:07

Simple way to avoid VAT on trail would be to offer no service ;-)

It would then be exempt as deferred initial commission as claimed by Zurich some time ago.

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Phil Castle

Mar 30, 2011 at 15:18

@ Andy Gibbs - Now that is a good one.

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l'ifa passeport en provenance de France

Mar 30, 2011 at 15:20

mmmm.......mip v pension? me thinks that a story

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Julian Stevens

Mar 30, 2011 at 15:22

You know what this is likely to mean, don't you? More special FSCS and FOS levies coming down the pike?

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l'ifa passeport en provenance de France

Mar 30, 2011 at 15:25

oh .... Man in black ,

gurus,superstars and long yacht holidays eh.

The chartered champion?

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Wallace

Mar 30, 2011 at 15:40

Then this must be the same Clive Holmes who sold a client I inherited a Skandia EPP and mistakenlt ticked the annual box for a large premium. And he is still authorised or is he giving advice on an execution only basis. I thought the FSA had executed all these rogues or am I being too naive?

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David Salmon

Mar 30, 2011 at 16:08

I suggest Gateway was a sinking ship the moment CH stepped on board.

Leopards, spots etc........

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Chris F

Mar 30, 2011 at 16:09

to: Andy Gibbs: Read my previous post and guess where the chap I was talking about now works? (Clue: It's Zurich)

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Gillian Cardy

Mar 30, 2011 at 16:27

Hmm ... I think the issue is that Gateway Consortium is marketing products, plans and other services to other IFAs. It doesn't sound to me like this is intermediation in the sense that IFAs intermediate between client and product providers.

The HMRC sound reasonably justified in taking the view that what they get paid by manufacturers to market and distribute is in fact a fee for service - rather more like sending a bill for PR, marketing or advertising ...

And as far as the bit of the operation that sounds like a network or membership group is concerned, membership fees should be VAT-able too.

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DogOtter

Mar 30, 2011 at 22:41

I don't think it's that straight forward. To choose to bring funds to the attention of IFA's and intitutions there needs to be a reasonable level of due diligence before promoting them. No serious business wants to take a dud to it's audience as it would loose credibilty immediately. Typically these will be alternative funds and part of the 'whole of market 'offering. The distributor will need a level of technical detail about the fund that is usually beyond that of the IFA, and like the architypal broker consultant, will usually assist the IFA in ensuring the paperwork is correct and gets to right place ensuring he (the distributor) and the IFA gets paid accordingly. That to me does sound like intermediation.

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JHA

Mar 31, 2011 at 09:52

The "Man from NLP" is never wrong so it seems and keeps on coming back and back and back.

I still smile at the mantra " a million pounds whole of life....because anything less will just not do the job!"

Read "Man In Black's" FSA link. Section 7 says it all and if anybody wonders where the seeds of RDR were sown in the FSA mind then it will become very clear....

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Great Rock and Roll Swindle

Mar 31, 2011 at 12:31

Nice to see what goes around comes around...fortunately or unfortunately the VAT man has beaten us to it...we have just prepared documents to serve on CJH for bankruptcy for a personal cheque for £11,000 (that bounced like a rubber ball) he wrote to us and had no intention of paying....ah!!! well VAT man has saved me £600....bitter sweet revenge...oh!! the irony...should not laugh really ...yes i should

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SW Ex GCL

Mar 31, 2011 at 13:17

I'm a former employee who Clive let go when he "had to" move out of the Leamington Spa offices. Have been fighting ever since to get over £4000 he owes me back in salary, notice and redundancy, with no luck, even though I won a tribunal. Hopefully now I can get what's rightly mine. Having had the misfortune of working with CJH for over 3 years, this is sweet justice for a horrible, self centred individual who should never be allowed to run a business again as long as he lives.

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michael rowley

Mar 31, 2011 at 14:29

Beware the Ides of March...!!!

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SW Ex GCL

Apr 05, 2011 at 09:18

Having had the misfortune of working with CH for over 3 and a half years, and spending the last 14 months fighting to get the £4K+ he owes me in salary etc, I have to say that I was so happy to read this. Glad to see he's got what he deserves. This self centred, arrogant, horrible little man should never be allowed to run a business again for as long as he lives.

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T Murphy

Apr 05, 2011 at 15:44

Nov. 26 (Bloomberg) -- The Champagne Bar at St. Pancras International station in London has sold one of its two top-priced bottles of Krug Collection 1949 and the buyer may have a bargain.

He paid 2,700 pounds ($5,561) for the rare vintage shortly after walking in and making small talk about the list, said Tim Stoneman, the bar manager. The Searcy-operated bar, which opened on Nov. 14, raised the price of the other bottle to 4,500 pounds.

``It's a great and rare champagne which I have probably tasted myself only twice or three times in my life, no more,'' said Olivier Krug, director of the champagne house and head of the tasting committee. ``It comes from one of those fantastic years we had after the war. It was a very small vintage for Krug.''

The buyer was Clive J. Holmes, chairman of Gateway Consortium Ltd., which offers investment advice to executives approaching retirement. Holmes, who lives on an estate in Ireland's Comeragh mountains, said he was on a visit to London with his wife Suzanne when they visited St. Pancras and wandered into the champagne bar.

``The staff were friendly and helpful and I had a look through the list and saw some marvelous things,'' he said in a telephone interview from Dungarvan, Ireland. ``I asked for a deal on the Krug and they said no way, so I said I'd buy it if the next two glasses of champagne were on the house, which they agreed to.

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Eva

Nov 14, 2011 at 04:56

I do not work in financial services and do not know much about that. So wouldn't like to comment the financial problems of Gateway Consortium. I feel really sorry that this went wrong as well as I understand the anger when check were bounced or people did not get paid.

I had the pleasure of working for Mr and Mrs Holmes. Several years ago I used to be a groom taking care of their horses. I was always paid on time and treated by Mr Holmes with kindness and respect. I never heard Him complaining about my work - just the opposite. Despite the fact that I was really stubborn groom and I argued sometimes ( I was young). Mr Holmes expresses himself in very distinctive way and maybe some people don't like it but I never had problem with that. I remember Him as a great man with fantastic sense of humor, always polite and helpful. And I learned a lot from Him and Mrs Holmes for what I'll always be grateful.

However I truly understand someone's anger is not necessary, in my opinion, being mean or enjoy other people's failure.

Best regards.

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Charles Pickup

Jul 02, 2012 at 00:07

Michael Rowley? I am sure he was one of Clive's desciples!! Name certainly rings some bells. Ding Dong!

Was doing alright until last year. Cannot imagine what went wrong?

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eamon ward

Jul 07, 2012 at 01:09

Yes CJH sold some massive policies at Abbey Life. What ever happened to those top producers who were in Ingestre Court Langam Place london in the early eighties, people such as David Knox, Chris Waite, Barry Allen. I can see the faces in my minds eye but I can not remember the names.

CJH had a Rolls Royce then and also as far as I know a helicopter ( but I think he was sharing it with somebody) At that time he was earning an enormous income so 400k by now should be mere chicken feed to him ???]

What happened ??

Anyway those were the days - Cold calling - Trying to get Referred Leads

Will someone remind me what CCSA stands for and how it was measured

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eamon ward

Jul 07, 2012 at 01:12

What ever happened to all those top producers at Ingestre Court Langham Place from the early eighties

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Response to Eva via mobile

Sep 28, 2012 at 20:32

Eva, I happen to know CJH's daughters - the ones he (you) walked out on when they were kids and they never heard from again. He's not a nice man. He's a sheister and a scammer and he destroyed his children's lives.

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Charles Pickup

Sep 28, 2012 at 21:12

Has anyone else noticed the comment from 'Eva'? Where 'she' refers to the great one as Him. Three times!!

Was he really a chosen one???

Chas

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Eva

Apr 04, 2013 at 05:01

I had a really good laugh when I realized that some people here think that I am not who I really am. That's very funny. I leave in US and I am certainly not a man haha. Now, in my language it is always polite to use capital letters when writing about Someone we respect. And because I do respect Clive Holmes I will always use the capital letter in this case.

BTW, I really understand the anger but seriously, the comments some of You leave here are a bit funny. It is like a bunch of teenagers talking - no offense :D. I would prefer to see Mr. Holmes happy and healthy and able to pay everything He owes to people then enjoying His financial problems. But this is my point of view.

I can only say(again) that I have good memories of working at Comeragh House stables in Ireland. I don't know whether Mr Holmes is a nice person or not but He was always good to me and I just appreciate it.

In my life I had experience when I wasn't paid by my employer. Was I angry? Yes, and that is why I understand everyone here. But sometimes there are reasons why that person cannot pay. And we never know the whole story. That's all...

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