Expat returning to UK - which framework to use?

[keymoo]

Hi,

When I was in UK I had a Ltd Company for about 12 years, was investigated for IR35 and successfully defended myself from an investigation thanks to Lawspeed. I have lived in Switzerland for the last 2.5 years and am returning to UK shortly. I have been offered a contract but I'm not sure what is the best way to structure my finances. I am considering:

1. An umbrella company that uses off-shore loans, an example being Cascade Management Solutions Limited: Tax-Efficient Remuneration for Contractors, Consultants, Freelancers, Ltd Company Alternative - Cascade - they claim 84% net take home. I'm unsure as to how legit these people are and it sounds a bit dodgy but I do know a number of people using this scheme for a few years successfully.
2. A full PAYE umbrella such as Tarpon: Contractor Umbrella Company Service UK They can give 60% net take home. Expensive and not very tax efficient.
3. A UK Limited Company - ~75% net? A happy midway between the previous two?

As I haven't been in UK for a while, I'm unsure as to which would be the best set-up. Could anyone provide some advice?

Thanks

[SallyPlanIT]

Hi,

When I was in UK I had a Ltd Company for about 12 years, was investigated for IR35 and successfully defended myself from an investigation thanks to Lawspeed. I have lived in Switzerland for the last 2.5 years and am returning to UK shortly. I have been offered a contract but I'm not sure what is the best way to structure my finances. I am considering:

1. An umbrella company that uses off-shore loans, an example being Cascade Management Solutions Limited: Tax-Efficient Remuneration for Contractors, Consultants, Freelancers, Ltd Company Alternative - Cascade - they claim 84% net take home. I'm unsure as to how legit these people are and it sounds a bit dodgy but I do know a number of people using this scheme for a few years successfully.
2. A full PAYE umbrella such as Tarpon: Contractor Umbrella Company Service UK They can give 60% net take home. Expensive and not very tax efficient.
3. A UK Limited Company - ~75% net? A happy midway between the previous two?

As I haven't been in UK for a while, I'm unsure as to which would be the best set-up. Could anyone provide some advice?

Thanks

If you want to go the Limited company route, you may have trouble opening a business bank account unless you own a property in the UK, have a personal bank account or you are on an electoral role here. I would advise checking this out before incorporating...if you go that route.

Good luck!

[malvolio]

Hi,

When I was in UK I had a Ltd Company for about 12 years, was investigated for IR35 and successfully defended myself from an investigation thanks to Lawspeed. I have lived in Switzerland for the last 2.5 years and am returning to UK shortly. I have been offered a contract but I'm not sure what is the best way to structure my finances. I am considering:

1. An umbrella company that uses off-shore loans, an example being Cascade Management Solutions Limited: Tax-Efficient Remuneration for Contractors, Consultants, Freelancers, Ltd Company Alternative - Cascade - they claim 84% net take home. I'm unsure as to how legit these people are and it sounds a bit dodgy but I do know a number of people using this scheme for a few years successfully.
2. A full PAYE umbrella such as Tarpon: Contractor Umbrella Company Service UK They can give 60% net take home. Expensive and not very tax efficient.
3. A UK Limited Company - ~75% net? A happy midway between the previous two?

As I haven't been in UK for a while, I'm unsure as to which would be the best set-up. Could anyone provide some advice?

Thanks

Option 1 - This whole area has just been closed down. Avoid at all costs. Run away from anyone trying to sell you one. People already in one may be OK but are facing a bumpy ride, joining them would be foolish in the extreme.

Option 2 - Avoid Tarpon anyway (they do not have a good history) but they are offering about the right level of return for an Umbrella (which makes a pleasant change). You are, after all, an employee on full PAYE/NICs

Option 3 - The most tax efficient, given that nothing is very tax efficient in the UK these days. 75% is probably the upper end of the average, around 70% is easily achievable. CLearly the way to go of you are aiming to stay freelance for any length of time.

[Old Greg]

If you want to go the Limited company route, you may have trouble opening a business bank account unless you own a property in the UK, have a personal bank account or you are on an electoral role here. I would advise checking this out before incorporating...if you go that route.

Good luck!

Really, with the bank account? I found an opening a Cater Allen account, via SJD Accountanct a pretty easy option. Speak to SJD (or another good accountant) before dismissing Ltd as an option.

[malvolio]

Really, with the bank account? I found an opening a Cater Allen account, via SJD Accountanct a pretty easy option. Speak to SJD (or another good accountant) before dismissing Ltd as an option.

It may not be a problem, the OP has only been away a couple of years after all. But perhaps better to be prepared for the worst. And FTAOD I would always advocate using a Limited if you're contracting seriously.

[keymoo]

Thanks for the replies. I will open a new Ltd company and get insured with PCG or Qdos.

[norrahe]

Really, with the bank account? I found an opening a Cater Allen account, via SJD Accountanct a pretty easy option. Speak to SJD (or another good accountant) before dismissing Ltd as an option.

WHS If your accountant has links to Cater Allen then you shouldn't have a problem getting set up with a bank account. StilWellGray do provide that service too.

[DeludedAussie]

Option 1 - This whole area has just been closed down. Avoid at all costs. Run away from anyone trying to sell you one. People already in one may be OK but are facing a bumpy ride, joining them would be foolish in the extreme.

since when and why? Why is it ok if you are already using this service?

[malvolio]

since when and why? Why is it ok if you are already using this service?

The schemes still work, it's just that as of now (actually as of Dec 9th) you will be liable to full PAYE and NICs on the income derived from it at April tax year end. If you're already in one then income taken before that date is probably OK (perhaps; certainly there is no obvious intention to apply the change retrospectively...), but joining one now would be a supremely stupid thing to do.

This is not new news. It was announced in the 2009 budget and several people have said that users of such schemes need to keep their eyes open. All that's changed is that the effective date has been brought forward, but it was always going to happen