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  1. #1

    Nervous Newbie


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    Default Thinking of moving back to LTD co...

    Hi All

    First time poster here today.

    I been contracting in the UK since 1998 and been through various 'tax planning' vehicles. LTD company, Montp dual taxation IOM scheme and I am now currently still with Montp. Yes I am an avid reader of the BN66 thread and very concerned about my families' future. I've been in my current contract for a number of years and have just been offered 6 months renewal ( 10% rate cut ).

    In the current climate where tax planning seems to have become a criminal act overnight I was feeling very nervous of staying on my current scheme and a LTD company is starting to look like a better option. Especially as HMRC now are able to change the law retrospectively.

    I would use this latest renewal as an opportunity to move to a LTD company and leave Montp. I want to ask people opinion on whether this would be a good move. How safe are we all feeling ?

    Am I likely to simply move from one headache into another IR35 nightmare ?

    Thanks in advance

  2. #2

    More time posting than coding


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    A limited company is the safest option you have. IR35 may be an issue depending on your circumstances and if it did apply then you'd have the option of a brolly, but at least you'd be able to sleep at night!

  3. #3

    More fingers than teeth

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    Firstly personally I would be moving out of an offshore option however bad the new ones look. IR35 is a pretty safe option that you have some control over compared to the offshore options. I haven't been involved tbh but not somewhere I would want to be right now.

    Secondly you need to read up on IR35 to find out what your situation is. Although long term contracts are not generally a pointer to IR35 it is very easy to become comfortable in your role and forget what you are. This has been proven in a number of cases involving contractors on long term gigs. It could be that you have put yourself inside IR35 for one reason or another and you might want to look at an umbrella option as well.
    'CUK forum personality of 2011' - Winner

    Yes really!!!!

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    Nervous Newbie


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    Quote Originally Posted by northernladuk View Post
    It could be that you have put yourself inside IR35 for one reason or another and you might want to look at an umbrella option as well.
    Thanks to all for the fast responses.

    I would almost definitely fail any IR35 test. So not a good thing.

    any names I should be googling for the umbrella option ?
    Last edited by wertert; 28th March 2012 at 12:28.

  5. #5

    I post more often than I breathe


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    Is anyone still with montp?

    I left in 2008 - if HMRC can clobber the double tax thing retrospectively they will do the same with loan schemes.

    I went Ltd - IMO easily the best way to go.

  6. #6

    Still gathering requirements...


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    I'm new to this forum but have been contracting since 1992.

    I used a Limited company but decided to take the plunge into a tax planning scheme just over 3 years ago.

    I spoke with my provider after the Budget and got an initial response that said scheme will be okay but they will communicate any changes necessary in the next couple of weeks.

    Have decided to wait before making a decision. My initial thoughts are these schemes are now becoming to risky and may also look to go back limited....

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    More fingers than teeth

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    Quote Originally Posted by wertert View Post
    Thanks to all for the fast responses.

    I would almost definitely fail any IR35 test. So not a good thing.

    any names I should be googling for the umbrella option ?
    You could check the CUK awards this year..

    CUK Reader Awards 2011 - at a glance :: Contractor UK
    'CUK forum personality of 2011' - Winner

    Yes really!!!!

  8. #8

    Contractor Among Contractors


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    Quote Originally Posted by wertert View Post
    I would almost definitely fail any IR35 test.
    Don't assume that is the case!

    Go limited - it is WAY safer that offshore. Get your contract reviewed. You will probably discover it is IR35 frirendly.

    Then join the PCG or get QDOS (or equivalent) insurance; both around 200-ish.

    Look at the stats (not to hand now but Malvolio will know them). The chances of you losing an IR35 case with PCG defence is very small.

    IMO you are insane to remain in an offshore scheme now (retrospective changes, GAAR (BBC News - George Osborne's new plans to tackle tax avoidance) being introduced etc.)

    Plus if you are married you can get close to the same take home as these schemes by income splitting.

  9. #9

    Nervous Newbie


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    Quote Originally Posted by Lewis View Post
    Don't assume that is the case!

    Go limited - it is WAY safer that offshore. Get your contract reviewed. You will probably discover it is IR35 frirendly.

    Then join the PCG or get QDOS (or equivalent) insurance; both around 200-ish.

    Look at the stats (not to hand now but Malvolio will know them). The chances of you losing an IR35 case with PCG defence is very small.

    IMO you are insane to remain in an offshore scheme now (retrospective changes, GAAR (BBC News - George Osborne's new plans to tackle tax avoidance) being introduced etc.)

    Plus if you are married you can get close to the same take home as these schemes by income splitting.
    Hi Lewis

    Very interesting post. I thought income splitting was a no-no these days ?

    Any ideas on a rough %age what I could expect to take out of LTD company. Please PM me if you don't feel like posting. I've been assuming 75%.

    Thanks

  10. #10

    Godlike

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    The GAAR sounds like a catch all where basically any scheme which is exploiting tax rules as they were'nt intended would not work. This sounds like it will be very simple for HMRC to prove a scheme doesn't work. This would actually bring the tax system into line with most other countries which just don't tolerate the interpretation that some accountants and lawyers have got away with in the UK.

    The risk isn't worth potential gains of tax planning. Lets face it with tax planning you don't really know the money is yours. With IR35 you can get insurance so you're fully covered.

    You don't want to take any risks which will potentially bankrupt you.
    Author of the bestselling book "The oceans will boil"

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