Paid as a loan from a trust fund
I have recently heard of "Peak perfomance" a company based in Cardiff. As far as I understand it operates like an umbrella company. The majority of the payments are paid as a loan from a trust fund set up in the Isle of Mann and therfore not liable to tax. The trust fund then folds and a new one is set up. It sounds too good to be true and so probably is. Does anyone have any info on this company and or simmilar schemes?
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If it sounds too good to be true then it is.
HTHǝןqqıʍ -
Blog? What blog...?
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I have worked with a couple of contractors who used a similar scheme except that the trust is based in Guernsey.Originally posted by darrenw14uk View Post
Their tax returns have not been investigated yet.
They were "evangelical" when explaining how it worked which suggests to me that they needed to convince themselves it was OK more than they needed to convince me,
I wouldn't touch such a scheme with a bargepole myself. I realise that with a Limited Company there is always the chance of an IR35 challenge but I am relaxed about defending such a challenge. I am overseas now so very relaxed about it.
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Most of these schemes aren't even legal now. Problem is, HMRC won't raise an enquiry until a while after you submit your returns, and even then it'll take a further few years before it's all resolved.
So if you go for something like this, you'll probably get loads of cash in your pocket for the next few years. BUT, you'll then spend a few more years waiting, not knowing what will happen, and then you'll probably find the scheme never actually did work, and you'll suddenly have to pay 6 years worth of tax & NI.
If you like the sound of that, go for it. If you don't, either go for a regular umbrella, or setup your own Limited.Comment
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Don't forget the interest on top, which is a real killer. It's added 45% to what I owe through the BN66 scheme. With BN66, everything was declared, hence there was "only" interest for late payment.Originally posted by Maslins View Post
But I worry about some of these loan schemes because nothing is declared on the tax return. Could this enable HMRC to impose penalties as well as interest?Comment
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Depends on whether they can argue you were careless/negligent in filling the tax return in.Originally posted by DonkeyRhubarb View Post
Not sure how that one would pan out. I suppose you (the generic "you", not you specifically!) would argue you took professional advice and did what you were told by people you trusted, so weren't negligent. Whether HMRC accept that is another matter.
Of course in turn you could try to sue the scheme provider for negligence...if they haven't disappeared off the face of the earth and if they have suitable PI cover. Two big "if"s.Comment
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Surely the best bit would be when the provider goes bust and the receivers appoint a debt collection agency to collect on all those 'loans'.
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I could be wrong here DR but, as I understand it, if HMR&C can prove that the tax avoidance was deliberate they have the option to impose penalties of up to 70% of the tax owed and if there was also deliberate concealment they can impose penalties of up to 100%Originally posted by DonkeyRhubarb View PostComment
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Lisa, I guess "accidental" tax avoidance is only permitted by MPsOriginally posted by LisaContractorUmbrella View Post
. On a more serious note, there is much that has yet to be established. How do the authorities view what was ostensibly income being handed over as a loan? Yes, a loan contract is a loan contract, but then we know what happened to the value of contracts with IR35.
Early days. Retrospection beckons if they win BN66.Join the No To Retro Tax Campaign Now
"Tax evasion is easy: it involves breaking the law. By tax avoidance OECD means unacceptable avoidance ... This can be contrasted with acceptable tax planning. What is critical is transparency" - Donald Johnston, Secretary-General, OECDComment
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