Anyone using Kinsella or PaySchemePlus?

[suburban74]

Hi

I've been having a few conversations with PSP today as I am moving jobs, and want to start winding down my limited company. I came on here to find out more about what people thought of their composite scheme, as a guy at work already uses it and recommended them.

First up, I had no problem getting through - you have to use the 0870 number though, as the 01923 number doesn't seem to get answered. This does seem a little odd, but I have been called back when promised, so suspect that's an old number or something.

Anyway, in terms of the scheme itself I totally understand it, and see how it works. As other people have mentioned, it is "aggressive" but totally legal as far as I can tell.

You take part of your earnings as salary and they handle the PAYE / NIC element of that and file your P60 with the IR. You also buy a share in a company, and you then take out a shareholders loan against that company. You draw down against that loan every month, and you pay them a bit of interest to make it worth their while. This also forms part of the scheme management fees.

When you sign up with them you have to agree to terms of employment for the salary part, buy a share in the company, and also sign a loan agreement form. The rest just happens automatically between your agency and them.

I agree it is a technical scheme, which seems to work well, and of course it is subject to investigation, but why would this not have happened already?

Anyway - I was impressed... let me know what you think...

[malvolio]

What do I think - if you are UK resident, you're being naive and/or you're being sold something with a bloody awful risk/return ratio. These schemes are already clearly marked as tax avoidance (yes, I know that's legal but Gordon doesn't and in reality that's what matters) and will be closed down and the participants (that's you, not PSP) will be asked for the missing PAYE and NIC contributions from all earnings back to 2004. The reason they are not under active attack right now is because HMG has now reseved the right to backdate tax legislation so there's no hurry and meanwhile they are looking deeply into umbrellas in general.

Of course I could be lying. You decide - but just try and work out why 99% of UK contractors don't use these totally legal, low risk and very efficient schemes???

[suburban74]

ok.. i do take your point, but it is a good scheme, provided you don't get busted

what do you think of the Giant strongbox approach (ie traditional managed limited company).. they are deemed IR compliant and friendly and insure against any f*ups....

granted it will cost me 15% in lost ££ compared to the other scheme, but less likely to get nabbed by the rozzers and do porridge.

[Cowboy Bob]

Do what you like. To be honest, I couldn't care less whether you get caught or not, but I'd probably have a laugh at your expense if you did. Contractors like you give the genuine contractors a bad name and promote the idea amongst permies that we are all tax dodging, greedy b'stards.

[suburban74]

get some sleep.. im just asking for opinion, not ridicule.

[Cowboy Bob]

And I gave it. It's obvious from your question which side of the fence you lie on.

[suburban74]

I was just relaying the solution as it had been described to me, the fact i was asking for opinion should have given you the clue..

Hope you dont treat all new people like this!

[malvolio]

Nope - that's what they keep me for.

You do what you like but do try to stop to think for a few seconds - if we didn't have people setting up complex and artificial ways of avoiding tax, and a sub-industry of imaginative accountants to do it for them, we probably wouldn't have IR35, S660-reapplied and an ongoing, in-depth inspection of umbrellas, small businesses in general and all the other FUD.

A good contractor using their own company and a totally legal and sensible structure can make around 25% more than a permie doing the same job, as a minimum. How many permie bog-standard C# coders do you know that can afford a TVR? Why risk the wrath of Gordie and screw up everyone else's reputation for the extra 2% on top?

The world is changing and there are a lot of contractors who seriously dislike these stupid schemes for the damage they do to our collective reputations.

[The Master]

suburban74, I am the Master and you will obey me... you will run your own on-shore Ltd in a tax efficient but totally legal manner that will not upset HMCR and avoid the use of all fancy schemes that will only come back and bite you in the bum for being greedy...

[Underscore2]

ignore all this lot

and go for it. Brown is too busy at the moment to come after you. and Dave C will allow all the off-shore once he gets in. Chill out and enjoy the extra 15k a year. Oh but make sure you buy a property off-shore......just in case.