Quote:
Originally Posted by Likely
Their scheme is based on 2 companies. One off-shore ( Honk Kong based ) which owns a UK Limited. Money get loaned to contractors from the HK based company(or from some offshore Trust arrangement ). As far as I see it , this-type of arrangement minimizes Tax , hence it is Tax Avoidance so in my opinion it should be disclosed.. However on my question if they have Disclosure number he replied some-nonsense. His answer basically meant - yes I know of the disclosure rules bet we don't follow.... ( I think they do it to stay below radars )
On another note -I have not been able to understand how they ( scheme providers ) divert funds offshore. I have read a Double Taxation Treaty. I also remember reading somewhere on the HMRC site that " even though an off-shore company owns a UK limited , still the revenue generated by the UK limited from operations in the UK will be subject to UK taxes ( corp taxes ) even though the offshore company owns the UK one". I think scheme providers go around this on the basis that international companies are taxed based on where the management ( HQ ) is located. Hence they purport the management resides offshore.. ( Does any one have a link to law about this ? )
I would presume the scheme provider fills annual returns to HMRC. These returns will show that funds were sent off shore because the 100 % Shareholder is an Off-shore company. So if the HMRC encounters such tax return , they will be alarmed anyway..... ( without the provider registering to the Disclosure Rules. )
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If the promoter of the scheme is based offshore, the duty to disclose falls to the
user.
The promoter is unlikely to remind you of this obligation though, are they? They might lose your custom.