using an offshore company ?

[cailin dana]

Have you ever thought of actually paying for professional advice?

[ASB]

If I am domiciled in Iran But have an company that is registered in the Cayman, and I have 5 employees, contractors , that work in the UK, I am going to be taxed in Iran , the Company in the Cayman and the employees in UK , correct ?

Pretty much. You are going to be (or should be) taxed by anybody who has an interest in the various entities. Then reliefs com into it. In the example you give the following are some of the possibilities:-

- You may or not pay Iranian taxes depending upon their regime.
- Assuming you are resident in the UK then you should be paying tax on UK salary plus - potentially - remittances. HMRC may also be considering the source of the funds that are being remitted to the Cayman company.
- The Cayman authorities will be interested in the company. Depending on how it is structured this will vary somewhat. Assuming it is non resident I imagine it will be subject to a flat tax but not allowed to carry on in business in the Caymans. This will also tend to eradicate any potential benefits of any double taxation agreements that may apply.
- The UK authorities will look at the company, it's business patterns and management. They will probably decide that it is UK resident anyway (companys gain tax residency in the same way as individuals). It will then be subject to all CT etc anyway. It may be possible for the company to offset any taxes paid elsewhere against any UK CT bill. If the company is registered in a tax haven and not trading there any DTA is unlikely to yield any benefit.
- If they fail in the above they may consider that the UK operation is a branch in which case the above will effectively apply.
- If there is a branch then transfer pricing arrangements are likely to come under close scrutiny.

Offshore schemes certainly can work, but it is very dependant upon the entities particular circumstances. Whilst it can be possible to get money into an offshore entity without suffering taxation it can often be difficult to get it out again.

As to how they find out, that depends. But they do have a lot of intelligence.

[meridian]

2uk, you might also want to remember the taxation principle that if an arrangement is entered into for the sole or main purpose of avoiding tax, then that arrangement can be treated as if it did not exist.

You might also want to seek professional international tax advice.....

[ratewhore]

The UK authorities will look at the company, it's business patterns and management. They will probably decide that it is UK resident anyway (companys gain tax residency in the same way as individuals). It will then be subject to all CT etc anyway.

Surely if you're not in the UK you would just flick them the finger and tell them to fuck off?

[ASB]

Surely if you're not in the UK you would just flick them the finger and tell them to fuck off?

Provided you have a completely impenetrable structure then that might be effective. These days everybodys authorities more cooperative. If you did just flick 'em the finger it would be a good idea never to arrive at any UK port of entry and show your passport [at least in theory, given our border controls I wonder if they'd actually notice].

It would also be a good idea to keep out of any commenwelath countries - HMRC have recently been to Australia to pick up a miscreant who arrived in Aus from somewhere out of their reach (though this was VAT fraud related).

I imagine you'd need to be talking large sums to get this sort of attention but at least in theory it can happen.

[DaveB]

The thing to bear in mind is that all this messing about with offshore entities and "tax management" schemes is that they too cost money. At the end of the day you need to weigh up whether it is actually worth the extra risk and cost for the saving you will be making.

Even if your scheme is rock solid you can still be challenged by HMRC and the onus is on you to prove you are legal which you then have to do at your own expense.

[Lucifer Box]

DaveB is spot on. These schemes can work with a lot of time and effort (and risk) hence are only for the seriously wealthy. Contractors looking to save a few grand will just end either with a large bill and fine or in prison because they cannot defend themselves to the extent that, say, Philip Green can.

[2uk]

Don't be silly.

That would be much too sensible....

don't have any Grands.

I know professional advice is the way to go. I just wanted to rise some attention to this , who knows we might rediscover something , and play around the HMRC. You afraid of some jailing ?!?! , come on - there will be at alst some time to study and relax.

2things that were commented above :

1. The cost to setup the offshore is nothing. ( The cost to operate it is almost nothing )
2. There is no flat TAX rate in the "offshore heaven" for companies operating outside the offshore zone. This is why the companies get registered in the offshore. In fact "offshore companies" are not permited to operate in the teritory of the offshore zone.

Now someone ask their accountant in the UK , and we'll get to the bottom of this

without grands..

I am researching this as much as I can, but can't do it all.

As we all agree we are looking for a "legitimate" hole in the system , we are not looking to get behind the bars.

[tim123]

As we all agree we are looking for a "legitimate" hole in the system , we are not looking to get behind the bars.

If there were legitimate" holes in the system don't you think that every man and his dog would be using it. And not just every UK man and dog, every German, French, Italian etc etc.

tim

[lith]

And not just every UK man and dog, every German, French, Italian etc etc.
tim

Then you go over to Germany and they're saying not just every German man and dog, every UK, French Italian etc etc. Then over in France they're saying...