Optima Professional / SP-Management / First 4 Lawyers

[neil99]

Moreover, the solution has been fully reviewed and backed up by Queens Counsel opinion. The solution is not affected by GAAR or registered for DOTAS.

QC Opinion is just a view of one expert on the structure before it has been tested in court. Would you run alpha software in production ? No. Most if us facing very large tax bills used schemes that a QC said might work. HMRC took another view. The courts have yet to decide in the majority of cases.

HMRC is already going after non-dotas scheme users.

There's too much risk in using anything but Ltd company.

I expect the chancellor to attempt to shut down Ltd 'personal service' company at the next budget anyway, so you may as well use an umbrella company and pay the max tax.

[eazy]

Indemnity Clause

Clause from SP
“indemnifies the corporate Trustee against any liability arising in respect of income tax, VAT or social insurance contributions, relating to Consultant’s duties under this contract”

If they are so confident, why do they have this clause?

[BlasterBates]

I have been in touch and they seem to insist that they do not run a EBT system,

I received this feedback


EBT’S
We are quite different to the EBT type of scheme you refer too and quite rightly may have read articles that raise concerns. An EBT (Employment Benefit Trust) relates to effectively being Falsely Employed and receiving disguised remuneration by being Employed and also links into IR35. And more importantly old DOTAS products.

Our solution is not considered to be a notifiable proposal or arrangement because it does not have any of the relevant hallmarks of a tax avoidance scheme. There is no confidentiality from HMRC or other promoters, there is no premium fee, there is no off market terms, it is not a mass marketed standardised product, it does not create losses, it does not involve pensions, and it does not involve leasing arrangements. Finally, the primary purpose of the arrangements is to provide workers with a vehicle through which they can work to provide services to clients that is convenient for them and which takes away the administration hassles of business/limited companies i.e. it demonstrates commerciality.

The disguised remuneration legislation is relevant to employment income only, not self-employment income. Also, it is not EBT’s that do not work, it is how long they have been used and abused in the past.

Difference between ourselves and an EBT?
The prefunded Trust is funded prior to discussions with the end client and has a pre-set limit for example £150,000 made available for the client’s benefit.

An EBT is an employee’s benefit trust and caught up in the 2011 Finance Act. Legacy EBTs are not recommended or used by ourselves.

Our solution has been designed to fully comply with all current and upcoming legislation. The group employ some of the leading tax experts in the country who continually monitor changes in legislation to ensure all our of consultants work in a compliant manner. Moreover, the solution has been fully reviewed and backed up by Queens Counsel opinion. The solution is not affected by GAAR or registered for DOTAS.

Everything we do is absolutely legitimate, compliant and lawful. If it wasn’t, we wouldn’t be where we are today. To confirm in writing - We make a pledge to our clients that if they are challenged by HMRC in relation to the solution, we will support those clients up to and including 1st Tier Tribunal to defend their case. If you were to become a client, this would extend to you. It’s worth noting that as a result of the robust planning and vast financial investment we put into our compliance teams, this has never had to be implemented, as none of our clients have ever been challenged by HMRC in relation to the solution.

It’s a PAYG service essentially, you’re not tied in to use our services for any amount of time. By all means, you can see how things work with ourselves – and if for whatever reason you wished to leave our service, you could take your Ltd Company elsewhere. If we don’t have an invoice to work with, and you don’t transfer the funds to ourselves, we can’t implement the planning.

Any thoughts? - Still stay away? I have a meeting with an accountant tonight to discuss also.

You're being lead up the garden path. You are getting a discretionary loan, this is identical to an EBT scheme.

If you go ahead you will be in severe trouble 5 years from now. The advantage of the scheme is that in the short term you will have more money, the disadvantage is that HMRC will come take the money back with interest and possibly penalties.

You will definitely regret it if you go ahead, absolutely no question about that.

[LandRover]

"Our solution"

That's enough to send anyone running for the hills.

Seriously wish I had known about CUK back in 2010-12 as I would have not be suckered into a scheme. HMRC have been very lax and allowed these schemes to be sold. You don't get a warning letter from HMRC after you join, in fact HMRC wait years and then attack you for being a scumbag tax avoider.

[regron]

If the previous 2 comments don't convince you, then spend some time looking and reading through the forum and if that still doesn't do the trick. Prepare to be shafted from here to kingdom come, in the not too distant future !!

[DaveB]

No point posting anything else in here, OP hasnt been back since the initial couple of posts a week ago.

[LisaContractorUmbrella]

Clause from SP
“indemnifies the corporate Trustee against any liability arising in respect of income tax, VAT or social insurance contributions, relating to Consultant’s duties under this contract”

If they are so confident, why do they have this clause?

Fairly sure that an indemnity against a tax debt is not worth the paper it's written on anyway

[mdebashi]

No point posting anything else in here, OP hasnt been back since the initial couple of posts a week ago.

Although the OP has left, I would like to thank you all for your help, I had a meeting with these guys yesterday, I was about to join if it wasn't for my gut telling me to triple check everything. As you guys said, it probably is perfectly legit scheme now, but 5 years down the line, may not seem as legit.

[jonnieboy]

Schemes were/are and always probably will be legit...

But the APN legislation means HMRC don't have to prove they are successful in avoiding taxation before issuing you with a bill

[LisaContractorUmbrella]

Schemes were/are and always probably will be legit...

But the APN legislation means HMRC don't have to prove they are successful in avoiding taxation before issuing you with a bill

It all depends on your definition of 'legit' - many of the schemes that have landed contractors in trouble with HMRC were completely sham arrangements rather than legitimate tax planning arrangements