Offshore schemes

[LisaContractorUmbrella]

Well the hot off the presses GAAR guidance is quite clear on UK tax residents operating through offshore schemes:

"The GAAR will apply to abusive arrangements where UK tax advantages have been obtained through rights or benefits under a dual taxation agreement" and "The express purpose of DTA's is to avoid double taxation and prevent fiscal evasion, not to facilitate double non-taxation"

[Higgs Boson]

Well the hot off the presses GAAR guidance is quite clear on UK tax residents operating through offshore schemes:

"The GAAR will apply to abusive arrangements where UK tax advantages have been obtained through rights or benefits under a dual taxation agreement" and "The express purpose of DTA's is to avoid double taxation and prevent fiscal evasion, not to facilitate double non-taxation"

This won't affect any of the freelancers in my building as they know better, the provider told them so and he wouldn't lie.

[cojak]

This won't affect any of the freelancers in my building as they know better, the provider told them so and he wouldn't lie.

In case the subtlety of HB's comment passed readers by, I'll add the last word.

NOT.

[Higgs Boson]

Why would they lie? They wanted me to give them 13% of my daily rate and in turn I don't have to pay any tax.

[cojak]

Why would they lie? They wanted me to give them 13% of my daily rate and in turn I don't have to pay any tax.

And did you take them up on their generous offer?

[Higgs Boson]

I was very tempted. I can see why people would sign up, especially if you are coming in to Britain from abroad and will only work here for a few years and then go back home. But that is not everyone that works in a bank.

Then I asked what would happen if I died (and it is a loan after all) and what would happen if the Inland Revenue changed their mind, am I liable for the tax.

[Project Monkey]

This won't affect any of the freelancers in my building as they know better, the provider told them so and he wouldn't lie.

... and it's backed by a QCs opinion so that's fine then. NOT!

[cojak]

I was very tempted. I can see why people would sign up, especially if you are coming in to Britain from abroad and will only work here for a few years and then go back home. But that is not everyone that works in a bank.

Then I asked what would happen if I died (and it is a loan after all) and what would happen if the Inland Revenue changed their mind, am I liable for the tax.

Right....

I thought you were joking in your original post Higgs Boson, but now I realise that you weren't. So I'll make it clear.

Providers are interested in obtaining your money - some of them will defend you if HMRC demand back tax from you, many of them won't.

They will tell you whatever is required to make sure that you sign on the bottom line.

It's up you to decide if what they tell you reflects reality.

Take a look at some of the little fish left wriggling on the HMRC hooks in this forum. HMRC Scheme Enquiries

Every little fish there is having a very unhappy time of it - their lives are on hold, many will be made bankrupt if HMRC succeed (as appears likely in many cases, despite what people say).

Because they believed the provider (who, incidentally is NOT on the HMRC hook and is a much bigger and clever fish that has closed down the scheme the little fish were swimming in and has moved onto better hunting grounds...)

[DonkeyRhubarb]

Joining a scheme was always bit of a gamble. These days it's even more so, especially now with the GAAR.

At best you might get away with c. 85% retention. (10% to the provider; 5% to HMRC)

The worst will probably be the same as inside IR35 with a competitive interest rate loan from HMRC.

If you spend the money then you're taking a very high stakes gamble.

[centurian]

The worst will probably be the same as inside IR35 with a competitive interest rate loan from HMRC.

And that's how many scheme providers justify their scheme is "zero-risk" - not zero risk of having to pay HMRC a penny more - but zero risk of having to pay anything more than inside-IR35 plus interest, which can easily run to well over 6 figures if in the scheme for years.