Norla EBT Loan Scheme

[Old Greg]

As I said a while back, as long as there are greedy hypocrites out there, someone will still be successfully selling these schemes.

I think you're being a little unfair, Mal. Hypocrites have principles to betray - I 'd just stick with greedy <insert abusive term of choice>.

[LisaContractorUmbrella]

What rules and regs?The suppliers are only advertising what they are selling and to be fair they usually deliver what they way they will. What they don't tell you is the potentially serious taxation issues you would face, but taxation is a personal concern. So they give you a pot of money but it's not their problem if you don't declare it properly or try to understand what tax you owe on it. After all, it's not their liability and it's not them that goes to court.

As I said a while back, as long as there are greedy hypocrites out there, someone will still be successfully selling these schemes.

I meant rules and regs on a wider scale - IR35 for instance - as well as tax legislation. You are obviously well versed in everything contractor but what made you start looking for pitfalls rather than believing what you read or what was recommended to you?

[prozak]

I think you're being a little unfair, Mal. Hypocrites have principles to betray - I 'd just stick with greedy <insert abusive term of choice>.

I wonder why you are so bitter?

In my opinion it is everyone's obligation to pay as little tax as they legally can. These scheme providers are providing a service for those that wish to legally avoid tax. As far as I can tell they make no false representations.

It has been proven time and again that governments are the biggest wasters of capital and cannot be trusted with your money. Private capital would fill any gaps more efficiently and provide a better quality of service. Do NOT pay them a penny more than you have to!

[prozak]

[QUOTE=LisaContractorUmbrella;1266020.....Although I have been accused on this forum of spreading fear, uncertainty and doubt....QUOTE]

well no. I said there was loads of FUD on your website.

And this was not restricted to the EBT world.

I have no problem with it. I just said I was amused by it. You need to have some FUD to make people go for an umbrella. It is a pretty standard sales tactic.

And lets face it.... you need fud to convice people to give up an extra 10-20% of their hard earned..

[malvolio]

I meant rules and regs on a wider scale - IR35 for instance - as well as tax legislation. You are obviously well versed in everything contractor but what made you start looking for pitfalls rather than believing what you read or what was recommended to you?

Because too many people aren't well versed in their trade as contractors and are at risk from over-optimistic acceptance of sales pitches. Taking on a scheme that is being aggressively attacked by HMG is not a good idea if you don't know what the risks are, as too many don't.

I don't care if people use umbrellas, Limiteds, EBTs or Matabele Gumbo Beans, but do care that too many don't know what they're are getting in to. And that means highlighting the risks rather than the rewards

[LisaContractorUmbrella]

[QUOTE=prozak;1266103]

well no. I said there was loads of FUD on your website.

And this was not restricted to the EBT world.

I have no problem with it. I just said I was amused by it. You need to have some FUD to make people go for an umbrella. It is a pretty standard sales tactic.

And lets face it.... you need fud to convice people to give up an extra 10-20% of their hard earned..

Actually no you don't Prozak - many people use umbrella's just because they are convenient and easy - not everyone wants to run their own business and not everyone is prepared to take risks with their hard earned cash. We have people working with us who would be considered very high earners who know that they are outside IR35 but they work with us because they want to. Why do you assume that anyone who uses an umbrella company does so because they don't know any better.

Also, we are not in the business of making things up to use as bogey men for new contractors so that we can get them into our evil clutches - what is written on our website is true.

[TykeMerc]

Prozac.

To be fair I used an umbrella for several years despite knowing IR35 was a non issue to me and my rates were much the same as they are now. It was a matter of pure convenience as my life was very complicated and I couldn't be bothered running a MyCo Ltd, umbrella was simple and effort free solution which suited me.

Yes I paid more tax, but at the time that wasn't the highest priority.

There are any number of reasons for people to use umbrella solutions.

[prozak]

Prozac.

To be fair I used an umbrella for several years despite knowing IR35 was a non issue to me and my rates were much the same as they are now. It was a matter of pure convenience as my life was very complicated and I couldn't be bothered running a MyCo Ltd, umbrella was simple and effort free solution which suited me.

Yes I paid more tax, but at the time that wasn't the highest priority.

There are any number of reasons for people to use umbrella solutions.

And that is my point. They are not more convenient. Part of the Umbrella FUD is that running your own LTD co is more difficult or time consuming.

[LisaContractorUmbrella]

And that is my point. They are not more convenient. Part of the Umbrella FUD is that running your own LTD co is more difficult or time consuming.

Umbrella company: Enter timesheet and expense details on line.
Get paid
Downside: Pay is less than if you were outside IR35 and running your own Limited Company

Limited Company: Register Limited Company
Set up company bank account
Raise invoice each month or week and record the sale in a sales ledger (on a spreadsheet or using accounting software etc)
Record every company purchase and expense in a purchase ledger or cash book (as above)
Chase for payment of invoice
Record receipt of payments and receipts and make sure that your recorded balance equals your bank balance
Possibly make PAYE payments
Prepare and submit VAT returns
Ensure that you manage your money so that you have funds available for corporation tax and VAT as and when required.
Ensure that, if you draw dividends, each contract that you take up is outside IR35
etc. etc.
Good contractor accountants have made much of this easier with intelligent spreadsheets and software but it is still ultimately your responsibility
Upside - your take home pay will be higher

[prozak]

many people use umbrella's just because they are convenient and easy - not everyone wants to run their own business and not everyone is prepared to take risks with their hard earned cash. .

This is part of the FUD. Umbrella's are less convenient and easy than a LTD company. You have a middle man who can make mistakes so you have to check they haven't. And when they have it takes more time.

The risk in my opinion for people's hard earned cash is handing it over to HMRC when they don't need to. Where is your risk? They can go LTD co and have a small risk of being in IR35 and having to pay some taxes..... OR they can just hand it straight over to HMRC up front.... hmmmm.. hard choice.

Also, we are not in the business of making things up to use as bogey men for new contractors so that we can get them into our evil clutches - what is written on our website is true.

"In summary, if you are ready to be responsible for running your own company, as well as sourcing and negotiating your next contract/renewal, setting up your own Limited Company is ideal for you.

If you simply do not have the time or energy to do all the above yourself, let an Umbrella Company assist with managing your financial affairs. It really is the hassle-free option to make your life as a contractor just that little bit easier."

I'll join your umbrella if you source and negotiate my next and all future contracts.

Do you really tell your contractors that they are now a FTE for the umbrella and don't need to worry about finding another contract?

Brilliant.... I am in ! Job for life regardless of how obscure my skill is or what demand there is in the market.