Sanzar Partnership? New IOM company

[Ardesco]

That's a bit of a leap from what I was saying. If you're not caught by IR35 why pay it? That would mean that you weren't paying the right amount of tax. There are lots of grey areas in tax but one thing I'm certain of is that the scheme operated by Sanzar and their ilk is immoral.

Not really what is a morally fair amount of tax to pay?why try and make your contracts outside IR35, the whole point of it was to tax contractors like permies.....

I think that you can only be responsible for your own actions and hope that others follow your example. I'd agree with what you are saying about government waste being potentially immoral but only if there was a definite plan to waste the money.

So wasting money is fine as long as you didn't mean to......

We are still a Christian country and have a duty to help those less fortunate than ourselves.

I think you are missing the point here. India's economy is booming, they don't need 800Million to help them out, they had a GDP of $1Trillion last year!!

[ChimpMaster]

One minor point you might like to consider and that probably has not been explained too clearly. If you get paid through a series of repeated loans and are UK resident for tax purposes, you are evetnually liable for all due taxes when the original loan is repaid. So unless you are lined up to live and work forever, I should have some serious savings tucked away for when you retire. Or even simply leave the scheme...

HTH

Malvolio - this is interesting and obviously invalidates the entire purpose of a scheme such as this.

Some questions if I may:
- what if you never repaid the loan, even though you may apparently 'intend' to at some point?
- how can simply leaving the scheme get you out of having to repay the taxes? Is this because you still owe the loan?
- how would HMRC ever know how much was loaned to you, and hence how much you owe in taxes?

[Cheshire Cat]

why would you have to pay tax when you repaid the loan amount?
If I borrow £200k from HSBC to buy a house I pay back the capital plus any interest, but not tax. When a permie borrows £5k each year from an interest-free season-ticket loan, he/she pays back the amount over the next 12 months, but not tax on top of that. Why would someone have to pay tax when repaying this loan, assuming the company ever asked for the loan to be repayed.

[Ardesco]

why would you have to pay tax when you repaid the loan amount?
If I borrow £200k from HSBC to buy a house I pay back the capital plus any interest, but not tax. When a permie borrows £5k each year from an interest-free season-ticket loan, he/she pays back the amount over the next 12 months, but not tax on top of that. Why would someone have to pay tax when repaying this loan, assuming the company ever asked for the loan to be repayed.

Because HMRC says so!!!

http://www.hmrc.gov.uk/manuals/ctmanual/CTM61630.htm

HTH

[NotAllThere]

He has not evaded it, he has avoided it.

Actually, I've avoided paying any tax whatsoever (other than VAT etc. ) in the UK for over five years. And quite legally. And I feel no shame at all either. Not a twinge of guilt wracks my conscience.

We are still a Christian country

No, the UK is a secular country.

and have a duty to help those less fortunate than ourselves.

Indeed we do. Probably, if we donated even 25% of the alledged avoided tax directly to those less fortunate, they'd be better off than if the government did it out of taxation.

[kryten22uk]

Getting back on topic; BrilloPad did you consider Sanzar or any alternatives before you chose Montpelier?

Anyone else gone through similar searches of (non-EBT) IoM schemes?

[ASB]

why would you have to pay tax when you repaid the loan amount?
If I borrow £200k from HSBC to buy a house I pay back the capital plus any interest, but not tax. When a permie borrows £5k each year from an interest-free season-ticket loan, he/she pays back the amount over the next 12 months, but not tax on top of that. Why would someone have to pay tax when repaying this loan, assuming the company ever asked for the loan to be repayed.

Ardesco highlighted some of the rules, however I think your position is somewhat different. You appear to be in an EBT based scheme. I would respectfully suggest you do some research from somebody other than the scheme promoter. With very limited exceptions EBT's have been made ineffective as a tax planning tool.

Essentially if you do not declare the income received (i.e. the "loan") you are guilty of a criminal offence.

If you do declare it the nice man from HMRC will seek to tax it as income (because that is what is, however it's dressed up and the law now allows him to do this).

If the loan is repaid then you will get some tax credit at that point.

If the company goes bust then the liquidators can call the loan.

[tim123]

I think you are missing the point here. India's economy is booming, they don't need 800Million to help them out, they had a GDP of $1Trillion last year!!

Yes, and they have a large population of people who have to do things like deliberately crippling their children so that they will collect more when begging in the street, if they don't just sell them into slavery instead.

We may have gone too far, but even a basic level of welfare costs a lot of taxes, which India chooses not to collect.

tim

[Ardesco]

Yes, and they have a large population of people who have to do things like deliberately crippling their children so that they will collect more when begging in the street, if they don't just sell them into slavery instead.

We may have gone too far, but even a basic level of welfare costs a lot of taxes, which India chooses not to collect.

tim

We have drug addicts that continually cut themselves open and show passers by the wound and ask for money for a taxi to get to hospital.... Again your point is?

I'm not saying that India is a country full of sweetness and light and yes there is a lot of poverty there, but 800Million is not going to change anything and there are countries in a far worse state than India who could use that money if you are going to give it away.

As nice as helping people is we should really clear our debts before we start giving money away, this government is in huge amounts of debt and they are thinking of new ways to tax us even more money to recover the shortfall, and at the same time we are giving away hundreds of millions of pounds????

Remember charity begins at home!

[THEPUMA]

If the company goes bust then the liquidators can call the loan.

I think often the loan is from a trust of which you and your family are the only possible beneficiaries so in that case the liquidators would have no call on the loans assuming the money had been appropriately transferred to the trust in the first instance.