Is this really legal

[vyas]

Hi

I am trying to find out if a company called Consultant Technologies is operating legally? They are offering something called a HMRC governed Enterprise Management Incentives option where they can attract and retain highly skilled resources by offering options to buy shares in their company. They will pay me a basic salary, and loan out money to me to buy the options. this option will apparently attract just 10% capital gains tax.

Has anyone heard of this place / worked with this company? I am with an MSC at the moment and am looking for an alternative to forming my own ltd company since i think the txman will come after the PSC's after the MSC's have been dealt with.

Thanks

[Bluebird]

Have not heard of this, the thing that would worry me is the following.

1. I'm sure that there are a few dodgy people out there trying to work a way of making money out of the 'worried' contractors who are using MSCs.

2. If you work for the company, and they then loan the money to you - think about what would happen if that company went bust ?
a) They would have your money and could have siphoned it off somewhere

b) If there are any 'creditors', the administrators could look for you to repay the loan you have been given

In other words you could get stuffed twice.

[ContractIn]

I never like the sound of "loan" when it comes to being paid in any form. I'd stear well clear.

[oraclesmith]

i think the txman will come after the PSC's after the MSC's have been dealt with.

Oh come on ! They've already tried that with IR35 and it's not easy money. Safety in numbers, that's what I say.

[Ennui]

I had a brief and unpleasant spell with Consultant Technologies. I would advise you to steer well clear of them.

[vyas]

Thanks everyone...

It sounds too good to be true and like they say, if it is too good to be true, it probably is....


Cheers

[XLMonkey]

It is (or at least, could be) legal. This is a device that lots of big consultancy firms use so that the partners can use capital gains tax allowances rather than income tax allowances for distributed profit.

But, its a terrible idea. You would have to trust the administrator to operate it correctly and it will cost a lot (since they will have to finance the loans).

I think that you're overestimating the risks of setting up a PSC. I can't see any way that Gordo can effectively get at contractors operating through their own limited company without also penalising millions of other small business owners. There'll always be some HMRC initiative to try to get more tax, there'll always be ways around it.

[Ennui]

The thing that really worried me about Consultant Technologies is their location. They claim to be operating from an office in Borehamwood but their phone numbers are IP numbers (020 71...) and when I got call from someone in accounts the number came up as Cape Town, South Africa.

I don't fancy trying to get my money back from someone who has already left the country!

[TaxesClear Ltd]

Hi there,

10% capital gains tax is not true for a company in the UK operated and controlled in the UK.

EMI options are available to trading companies in the UK who wish to attract investment focused employees.

The tax incentive is only available after 2 years of ownership of the investement and the investement must be of a minority nature.

We are Accountancy/Tax Planning Company focusing on small businesses and OMBs companies. We pride ourselves on providing a personal service at a fixed costs.
We can set up Ltd company for you and produce accounts in the end year, plus provide you with the ongoing tax support/review and advice.


Dennis

[oraclesmith]

.....and they speak Russian. Not you AtW is it ?