Offshore clarification

[Flat Eric]

OK, please don't flame me.

I've read a few posts and I'm still not 100% sure how these things operate.

Firstly, I've no intention of doing this, I simply would like to know how they operate.

As I understand it..

You would set up a Ltd company in the UK, let's call this LTU.

You would either set up or use an existing company in the IOM (or similar), let's call this LTI.

Then you would have an ageny, AGU, and a client, CLU.


LTU find work at CLU through agent AGU and they sign contracts.

LTU subcontracts the work to LTI and they send their UK based employee to do the work.

LTI invoices LTU.

LTU invoices AGU.

This effectively moves all cash to LTI.

This has the advantage of AGU not knowing anything about LTI which avoids the question of some agents not wanting to touch offshores with a bargepole.

Is this roughly how it works ?

This looks too good to be true so, as always, it probably is. It's just not obvious to me why.

[ElectricChair]

OK, please don't flame me.

I've read a few posts and I'm still not 100% sure how these things operate.

Firstly, I've no intention of doing this, I simply would like to know how they operate.

As I understand it..

You would set up a Ltd company in the UK, let's call this LTU.

You would either set up or use an existing company in the IOM (or similar), let's call this LTI.

Then you would have an ageny, AGU, and a client, CLU.


LTU find work at CLU through agent AGU and they sign contracts.

LTU subcontracts the work to LTI and they send their UK based employee to do the work.

LTI invoices LTU.

LTU invoices AGU.

This effectively moves all cash to LTI.

This has the advantage of AGU not knowing anything about LTI which avoids the question of some agents not wanting to touch offshores with a bargepole.

Is this roughly how it works ?

This looks too good to be true so, as always, it probably is. It's just not obvious to me why.

If you dont want to do it - why do you care how they operate? It does work - Ive been doing it for a while.

[Flat Eric]

I was curious about how they operate.. I'm not trying to slag them off or pick holes ..

So givem that you operate through one, have I got it broadly right...

In effect the UK LTD is effectively a "finder" in the relationship ?

M.

[ElectricChair]

I was curious about how they operate.. I'm not trying to slag them off or pick holes ..

So givem that you operate through one, have I got it broadly right...

In effect the UK LTD is effectively a "finder" in the relationship ?

M.

but why are you curious? if you are considering one then fine.

Are you Hector?

[Flat Eric]

Pls read all of my posts. If I was Hector, wouldn't you think that I'd be clued up about this...

Sheesh, this place is becoming more McCarthy-ite by the minute...

I'll start the ball rolling..

"ElectricChair... YOU ARE A COMMIE..!!...."

Now if you wouldn't mind answering my questions

[ElectricChair]

Thats the second time in my life Ive been called a commie. 1st time was for daring to suggest that torys had no chance in 2005 election. Turns out my accuser had voted labour in 1997 - I have voted tory ever since I could vote in 1983.

But I wont be voting tory this time - have not decided yet between liberal, bnp or monster raving looney.

[Flat Eric]

...
I have voted tory ever since I could vote
...

That makes two of us

[NadJ]

If your offshore has a UK address (in truth a virtual address, with mail and phone call forwarding), the only other way an agency can tell if a company is an Offshore Ltd is by inspecting the company registration certificate. How many agencies ask to see your certificate when you contract with them? I'm in my 4th contract in 2 years and so far not one agency asked to see my UK Ltd certificates.

Many people pussyfoot about when answering this simple question:

Money that goes, for example, into the Panama bank account of a Panama based company is subject to UK tax under what circumstances?

Is it:

A.) When that money is "brought" to the UK
B.) If the Director of the company is UK resident.

If it cannot be proven you are the director of the said company, then then only other way of HMRC determining you are not benefiting from your worldwide income is by proving you're spending the money beyond your means. And if you don't spend the money, then this fact cannot be proven either?

...Which means you have successfully AVOIDED or EVADED the UK tax system?

Simple answers please.

[Davey78]

If your offshore has a UK address (in truth a virtual address, with mail and phone call forwarding), the only other way an agency can tell if a company is an Offshore Ltd is by inspecting the company registration certificate. How many agencies ask to see your certificate when you contract with them? I'm in my 4th contract in 2 years and so far not one agency asked to see my UK Ltd certificates.

My current (and only) contract required me to show a copy of the Certificate of Incorporation and a report from Companies House proving that I am a director (and thus able to sign the contract of behalf of my Limited company). So it does happen.

[exbrm]

Latest from HMRC website:

http://www.hmrc.gov.uk/employment-st...egislation.htm

"Some offshore arrangements claim that Chapter 8 (IR35) and Chapter 9(MSCs) do not apply in offshore locations. Such statements are misleading. Where a worker is resident in the UK and the work is carried out in the UK, the intermediary (in Chapter 8) or MSC (in Chapter 9) is treated as having a place of business in the UK and, subject to other qualifying criteria, Chapter 8 and 9 do apply."

It could never be that easy...........