I always knew we were right....

[cojak]

I rest my case.

What?? What case?

Vallah didn't support or even refer to your case, he was refering to a different aspect of the thread, not your assertion that most contractors use loan schemes.

I believe that Vallah works for an off-shore provider.

(Did you notice that I put 'I believe'? I didn't say that 'Vallah works for an off-shore provider' even though I'm pretty sure that he does. You need to recognise the difference between a personal belief/opinion and an objective fact, Ondine.)

[d000hg]

And I partly disagree with Brillo's view actually: what they are against is using an artificially-constructed scheme with no other business objective than saving taxes. Quite rightly

Good distinction. As a contractor, setting up a Ltd can have great tax advantages and allows you to avoid some tax - but that is only one benefit and not, in my view, the primary reason to run a Ltd.

[LisaContractorUmbrella]

I agree that UK Payroll umbrellas shouldn't be tarnished with the same brush as dodgy offshore umbrellas.

But Not all UK payroll umbrellas are compliant, Contractor Umbrella may be, but quite a few aren't. One of my friends was refused a mortgage because her pay slip raised more questions than answers. That's why I think Umbrella Companies may have a limited existence.

Is Contractor Umbrella related to SJD Accounting?

Yes, we are sister company to SJD - literally actually - Simon Dolan is my brother

[LisaContractorUmbrella]

Just from talking to other contractors on these schemes and contacting quite a few providers a year ago.

Some of the providers I spoke to a year ago recommended a scheme called "Business Benefit Trust" or "Sole Trade Trust". I think that's what they referred to them as. They suggested that I received two payments, one small payment (Minimum wage around £10K) and the remaining part of my income in the form of a loan trust paid directly into a personal bank account (Not a limited company account). I was to operate in a self employed capacity NOT employee.

I spoke to a number of different providers, they included:

Sanzar
Darwin
Best Pay
AML
Halo
Offshore Umbrella

I decided that this was NOT for me. Too dodgy.

Some of those have gone down the tubes now so I don't think they will be offering much in the way of anything

[LisaContractorUmbrella]

May be Lisa from ContractorUmbrella can comment. I'm sure she can shed some light on this subject.

'Most' contractors do not operate through dodgy offshore loan schemes as they are not daft Quite a number do operate through umbrella companies but I would think that a higher proportion work through their own Ltd Co's

[LisaContractorUmbrella]

Its actually quite simple, they are not umbrellas they are offshore/onshore tax schemes that may or may not masquerade as umbrellas.

They are not however umbrellas because they don't pay everything as PAYE.

Excellent point - well made

[DonkeyRhubarb]

'Most' contractors do not operate through dodgy offshore loan schemes as they are not daft

Although we are talking tens of thousands, so not an insignificant number.

Aside from the moral arguments, I can't fathom why anyone would risk this in the current climate.

[eek]

Although we are talking tens of thousands, so not an insignificant number.

Aside from the moral arguments, I can't fathom why anyone would risk this in the current climate.

A glossy brochure, smooth salesmen and fancy offices is enough for many people to ignore reality. People see the extra £100 a week and ignore the obvious flaws because they want that extra £100.

[LisaContractorUmbrella]

A glossy brochure, smooth salesmen and fancy offices is enough for many people to ignore reality. People see the extra £100 a week and ignore the obvious flaws because they want that extra £100.

Do you think it is that simple Eek - just plain old fashioned greed?

[eek]

Do you think it is that simple Eek - just plain old fashioned greed?

Yes because if they read around the issue they would notice the flaws in the plan. Hence they either :-

1) read up on the issue but greed gets the better of them
2) they just go for what they believe to be the best option and ignore the possible risks.

There is a third option that they believe what the salesman tells them that its risk free and safe but even then its still greed that makes them sign up for the deal compared to the more sensible approach of a limited company + accountant or straightforward umbrella.

DonkeyRhubarb is probably a far better person to ask here as he got stuck trying to escape IR35 when that first appeared. I'm not trying to score points here I really would be interested in the reason why people signed up for these schemes.