Offshore Company - Almost too late to back out - advice please

[gables]

northernladuk, I already have a LTD company set up, but as I was PAYE (temp) for a while it became dormant. I have re-activated the co and account ready for this new contract. So at least I don't need to worry about setting the LTD co. up now, and I can register for VAT later can't I? The daily rate is not massive by contractors standards, so won't be missing out on that much without the VAT.

Priority at the moment is indeed just getting in there and starting work, but I will need to find professional help asap, so will contact some of the firms mentioned.

Feels like I may have had a narrow escape there, thanks to you guys

Yup, you can register for VAT later, you don't have to of course unless you're going to exceed the required turnover, and then you have to do it in a certain time period. If you're not going to hit the turnover then register whenever you like.

[DonkeyRhubarb]

I think you're exactly right Alan and it is something that HMRC have been warned about (by me amongst others) - if they keep pushing and pushing in our sector I think people will eventually get the attitude of 'might as well be hung for a sheep as a lamb'.

This is exactly what happened after they introduced IR35. Prior to IR35 who ever heard of contractor avoidance schemes? IR35 created the market, and it was easy money for scheme promoters.

HMRC have also killed off DOTAS with the imposition of APNs. No-one is going to disclose schemes any more. APNs will drive everything underground.

I guess we could be in for another huge mess in a few years time.

[stek]

This is exactly what happened after they introduced IR35. Prior to IR35 who ever heard of contractor avoidance schemes? IR35 created the market, and it was easy money for scheme promoters.

HMRC have also killed off DOTAS with the imposition of APNs. No-one is going to disclose schemes any more. APNs will drive everything underground.

I guess we could be in for another huge mess in a few years time.

The bigger the EBT etc mess, the less time HMRC have to cheery pick IR35 investigation....

[TykeMerc]

thanks all, so glad I asked before going any further and I just hope they can't legally demand any money yet for time wasted etc..

But it would be useful to get some concrete evidence, even if anecdotal from someone who has had a bad experience, as just advising me to run is great and useful, but not very informative!

Think I will so what is suggested though and seek advice from one of those respected names mentioned.

You don't need "concrete evidence". If you go with the scheme you will have ZERO, that's none, nada, zip, bupkis rights to the money the agency pays to what is then your employer and who's offering to pay you via a bent scheme.

As mentioned by others HMRC will tear you to pieces when they get wind of you as a scheme user and you will completely deserve the abuse they dish out as these schemes were busted publicly years ago.
Obviously it's entirely your choice, but if you do jump into a scheme then you will get no sympathy from a large number of people on CUK when the pain starts.

If you have no interest in managing your own accounts and business then go with a reputable Umbrella (Contractor Umbrella who post on here have a decent rep) company, but you will be unlikely to get a retention rate near 70%. That being said you will have no grief from HMRC over unpaid tax.
Otherwise get a good contractor accountant on side, they can help you set up in under a day and they will offer sound advice and service. Again many good accountants post on CUK and there's even a whole thread dedicated to recommendations.

[DonkeyRhubarb]

The bigger the EBT etc mess, the less time HMRC have to cheery pick IR35 investigation....

That's true.

Schemes are far easier, and much more lucrative, to attack than individuals operating through Ltd companies.

In a perverse way, it would suit HMRC if every contractor joined a scheme.

[hugebrain]

So, I said, it's a sham arrangement with no real purpose other than to avoid tax?

Surely that can't be sufficient reason for a scheme being illegal?

Just asking because I have an ISA.

[LisaContractorUmbrella]

Surely that can't be sufficient reason for a scheme being illegal?

Just asking because I have an ISA.

An ISA is not a sham arrangement; it's a recognised and legitimate product.

This scheme involved contractors investing money in an EIS - only they weren't, it was just on paper. They then received a loan from another company - only they didn't, it was just on paper. What happened in reality was that contractors were paid, via a third party, the money that they had earned in that week/month less the scheme providers no doubt extortionate fee - everything else is just semantics and therefore a sham arrangement.

[NickNick]

So OP, how did you hear about the scheme? Was it recommended to you? By whom? Or did you find it by Googling for it?