Offshore tax avoidance schemes

[dude69]

Just looking at two or three of these.

All seem predicated on paying a £20k income, on which you pay about £3k. This is the only tax paid on £100k of billings.

The rest of the money, somewhere over £10,000/year depending on the scam scheme on the aforemention £100k/year, is profit for a very rich bloke somewhere.

They all claim their scams, sorry schemes, are legitimate, so why are they even bothering to pay the UK tax? Reduce the income so it's tax-free after expenses and personal allowance, and you pay nothing. Then claim tax credits as well. You can then say 'Up yours HMRC - we're legitimate'.

So why????

[Lewis]

Just looking at two or three of these.

All seem predicated on paying a £20k income, on which you pay about £3k. This is the only tax paid on £100k of billings.

The rest of the money, somewhere over £10,000/year depending on the scam scheme on the aforemention £100k/year, is profit for a very rich bloke somewhere.

They all claim their scams, sorry schemes, are legitimate, so why are they even bothering to pay the UK tax? Reduce the income so it's tax-free after expenses and personal allowance, and you pay nothing. Then claim tax credits as well. You can then say 'Up yours HMRC - we're legitimate'.

So why????

To avoid investigation ... a guy here is on an off-shore scheme, when he asked why he couldn't take a lower salary he was told, to keep you under the radar. I think his was more like £30K salary.

[BrilloPad]

Just looking at two or three of these.

All seem predicated on paying a £20k income, on which you pay about £3k. This is the only tax paid on £100k of billings.

The rest of the money, somewhere over £10,000/year depending on the scam scheme on the aforemention £100k/year, is profit for a very rich bloke somewhere.

They all claim their scams, sorry schemes, are legitimate, so why are they even bothering to pay the UK tax? Reduce the income so it's tax-free after expenses and personal allowance, and you pay nothing. Then claim tax credits as well. You can then say 'Up yours HMRC - we're legitimate'.

So why????

You also pay Class one and class 4 NI - think that adds another £1k per year.

Remember that the scheme needs to pass a stringent set of criteria or HMRC will rip it apart.

It is not all profit - they need to pay alot of good lawyers/accountants.

Isn't that what HMRC advocates for rich people these days? Leaving the poor to twist in the wind...

[dude69]

To avoid investigation ... a guy here is on an off-shore scheme, when he asked why he couldn't take a lower salary he was told, to keep you under the radar. I think his was more like £30K salary.

I don't get this.

These people pay £3-£6k in tax, but avoid more like £20-£30k.

The former doesn't seem to have any bearing on the latter - the government's coffers are still short some £20k or more (although £10k has been diverted offshore somewhere), which seems like a big target compared with the trifle of £3k actually being paid. In terms of blips on the radar, it is the amount of tax avoided, not the amount paid that shows up.

If you are going to do it, it must be legal, so avoid as much tax as possible, all stick together, and pay yourselves minimum salaries.

[Ardesco]

I don't get this.

These people pay £3-£6k in tax, but avoid more like £20-£30k.

The former doesn't seem to have any bearing on the latter - the government's coffers are still short some £20k or more (although £10k has been diverted offshore somewhere), which seems like a big target compared with the trifle of £3k actually being paid. In terms of blips on the radar, it is the amount of tax avoided, not the amount paid that shows up.

If you are going to do it, it must be legal, so avoid as much tax as possible, all stick together, and pay yourselves minimum salaries.

Tax avoidance is completely legal. How is not paying tax that you do not legally have to pay going to show up as a blip on the radar??

[Chugnut]

To avoid investigation ... a guy here is on an off-shore scheme, when he asked why he couldn't take a lower salary he was told, to keep you under the radar. I think his was more like £30K salary.

You've got to question whether it's worth it then: -

1/ I bet the fees for using the scheme are reasonably hefty.

2/ If they are based offshore and there is no UK promoter, the user of the scheme has a duty to disclose it to HMRC and put the ref number on their tax return. Some radar avoidance.

3/ Retained income would probably end up being better through a fully legal uk based limited company of their own, paying a smaller salary with tax insurance backup.

4/ The 6 year investigation window. Will the scheme promoter still be around to help with any inquiries in a few years time?

5/ Agents probably won't deal with offshore companies.

Screw that, IMO.

[BrilloPad]

I don't get this.

These people pay £3-£6k in tax, but avoid more like £20-£30k.

The former doesn't seem to have any bearing on the latter - the government's coffers are still short some £20k or more (although £10k has been diverted offshore somewhere), which seems like a big target compared with the trifle of £3k actually being paid. In terms of blips on the radar, it is the amount of tax avoided, not the amount paid that shows up.

If you are going to do it, it must be legal, so avoid as much tax as possible, all stick together, and pay yourselves minimum salaries.

Remember that HMRC does not do joined up thinking. They require only bully boy tactics.

The other day they sent me £1600 which I do not want and will have to pay back later in year. very very long story - but they do not have a clue.

And in 1990 they forgot to charge me higher rate tax alltogether! Saved me £1800

And after getting shafted by the government in my divorce I am really pleased about it. I don't ming paying my due to society - well I didn't until the divorce. But now I will duck and dive at every stage.

[BrilloPad]

You've got to question whether it's worth it then: -

1/ I bet the fees for using the scheme are reasonably hefty.

2/ If they are based offshore and there is no UK promoter, the user of the scheme has a duty to disclose it to HMRC and put the ref number on their tax return. Some radar avoidance.

3/ Retained income would probably end up being better through a fully legal uk based limited company of their own, paying a smaller salary with tax insurance backup.

4/ The 6 year investigation window. Will the scheme promoter still be around to help with any inquiries in a few years time?

5/ Agents probably won't deal with offshore companies.

Screw that, IMO.

1. fees not hefty

2. get one with onshore presence

3. great if you are not divorced with an ex-wife to pay

4. good point!

5. true - but if you get one with onshore presence you are fine.

You are entitled to your opinion - you fit in with the majority here...

[Lewis]

I don't get this.

These people pay £3-£6k in tax, but avoid more like £20-£30k.

The former doesn't seem to have any bearing on the latter - the government's coffers are still short some £20k or more (although £10k has been diverted offshore somewhere), which seems like a big target compared with the trifle of £3k actually being paid. In terms of blips on the radar, it is the amount of tax avoided, not the amount paid that shows up.

If you are going to do it, it must be legal, so avoid as much tax as possible, all stick together, and pay yourselves minimum salaries.

I think the theory is that if you earn £5K you are more likely to be picked for investigation than if you earn £30K. Lots disagree others (e.g. QDOS) agree with the argument. Which is why they insist on a £9.5K salary for their insurance. I think the idea is that if you pay £30K they will ignore you and not discover you are actually avoiding a whole lot more!

[Lewis]

You've got to question whether it's worth it then:

I agree 100%. In fact you can get over 80% take home if you are married, all completely legit. It will be more like 75% next year though due to 'income shifting' legislation. These schemes offer around 85%. There is no point going off-shore with all the associated risk for a couple of K a year!