85%, 90%, 91% take home?

[andygolfer]

Guys, I'm new to this contracting game (in fact not yet started) and need a piece of advice. I have been looking round the web and see companies offering tax planning solutions to take home 85%, 90%, 91% of your gross pay. Having contacted a few, some mention loans from family trusts, some offer a dividend from a partnership etc. All involve the Isle of Man. Are they exploiting a legal loop hole (in which case why doesnt every contarctor use them) or are they operating in a grey area which may one day come back to bite the contractor. Any help appreciated.......

[tim123]

Which do you think it is?

(Hint: why doesn't evey contractor take advantage of them?)

tim

[basshead]

are they operating in a grey area which may one day come back to bite the contractor.

IMO, yes. See the BN66 threads in this forum and TRM thread in the Business/Contracts forum for examples of the kind of view HMRC are taking of such schemes.

HTH

[Beefy198]

As they say on The Real Hustle... if it looks too good to be true, it usually is

[Fred Bloggs]

Repeat after me................ If it's too good to be true it usually is etc...

[BrilloPad]

Guys, I'm new to this contracting game (in fact not yet started) and need a piece of advice. I have been looking round the web and see companies offering tax planning solutions to take home 85%, 90%, 91% of your gross pay. Having contacted a few, some mention loans from family trusts, some offer a dividend from a partnership etc. All involve the Isle of Man. Are they exploiting a legal loop hole (in which case why doesnt every contarctor use them) or are they operating in a grey area which may one day come back to bite the contractor. Any help appreciated.......

I was using IOM - but am switching to limited. Only so much excitement one can stand.

There is also a loan thread (redding?) with some worrying reading.

[pmeswani]

Guys, I'm new to this contracting game (in fact not yet started) and need a piece of advice. I have been looking round the web and see companies offering tax planning solutions to take home 85%, 90%, 91% of your gross pay. Having contacted a few, some mention loans from family trusts, some offer a dividend from a partnership etc. All involve the Isle of Man. Are they exploiting a legal loop hole (in which case why doesnt every contarctor use them) or are they operating in a grey area which may one day come back to bite the contractor. Any help appreciated.......

Feel free to tell the tax man about these schemes and ask them if they are legal. If they say no, join them. Even better, speak to a few Accountants. If they can't get you onto the scheme, suggest that they give up their trade. Don't get duped into schemes that make such promises. You may be drawn into taking out a loan (EBT?) in order to get around the tax rules. A lot of people have fallen foul of these schemes. Don't be fooled.

[andygolfer]

great advice guys. As you say...."if it looks too good to be true"....Thanks.

Is anyone in these schemes prepared to

a) admit it
b) give their thoughts on it?

I guess its just down to an individuals attitude to risk, but its not for me.

Cheers
Andy

[TykeMerc]

As the others have said these schemes are a very high risk strategy.

I've no doubt that you detest paying the tax man as we all do, but being able to legally pocket a take home of those percentages isn't viable.

There are also a LOT of shysters around that will promise the earth and then run off with your contract rates after they employ you for beans which means you're working for their company and not yours, this applies to some Umbrellas too.

Umbrellas that claim huge take homes are quoting numbers that require you to have huge "expenses" and if you haven't spent it you really can't claim it without asking to get molested by the tax man in retribution.

As was said earlier and it bears repeating in an indefinite loop...

IF IT LOOKS TOO GOOD TO BE TRUE IT IS TOO GOOD TO BE TRUE!!!!!

[Likely]

As they say on The Real Hustle... if it looks too good to be true, it usually is

too good or true ?