• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

umbrella companies and the money laundering rules

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    #11
    FMCs

    s739 Taxes Act 1988

    the following provisions of this section shall have effect for the purpose of preventing the avoiding by individuals ordinarily resident in the United Kingdom of liability to income tax by means of transfers of assets by virtue or in consequence of which, either alone or in conjunction with associated operations, income becomes payable to persons resident or domiciled outside the United Kingdom
    .

    ie you can't avoid tax in the UK by giving it to a company overseas eg IOM, Jersey, Guernsey etc etc

    I think that, the controlled foreign companies legislation and the transfer pricing legislation about covers it.

    As I've said before, do not believe that any of these schemes will work unless you have in your hand a letter from the Inland Revenue saying everything is fine and above board for your particular circumstances.

    Comment


      #12
      Re: FMCs

      Bradly,

      Sorry, I was referring to those companies that manage income from overseas employment.

      These companies have schemes which limit liability to tax in the 'host' company and are unambigiously free of UK tax once someone has met the non-residency rules (one complete tax year).

      However, they will tell you (as they did me) that this money is *always* free of UK tax even if you return after a few months. This advice is patently wrong, and they must know this (at least the managers of these companies must know). Are they now risking a criminal prosecution for this? (and FYI I do hope that they are, it should cost nothing to give correct advice)

      Tim

      Comment


        #13
        Re:FMCs

        Sorry Tim - started a rant and couldn't stop!

        Any suspected tax evasion must be reported to NCIS under the money laundering rules by either the agent to the scheme or more likely any UK bank that you transfer the funds to after you come back to the UK(the banks have been subject to the ML rules for longer).

        How much evidence do you need for suspicion? - whatever a reasonable person would consider as proof.

        Comment


          #14
          Re: Re:Suspicion

          tim123: If she aint using it then I think she is okay - its up to Revenue to check their books to see if she is on the scheme. She uses this address for all mail including IR tax returns (obviously i did not open them but i see front) and she actually does not live in the house. If she did not use the scheme then I see no reason why would she get all mail at this address and use it on all contracts. In any case its up to Revenue to decide if she breaks or not - from my point of view I can go to court and prove that she did not live there for at least 18 months - and thats not just my word.

          Fiddle wise - my calculations are different. IF she is using rent a room then she can have £4250 every year tax free - now she since she did not live there this amount would be subject to income tax - 23% I believe, which is £1k per year, and she definately was into this for at least 2 years.

          Well, shame IR wont take her to court - she did take me to court for alleged damages and lost it spectacularly

          Comment

          Working...
          X