Tax Evasion or Aviodance Legal or not??

[sharemaster2]

Hi folks,

Have been contracting through my Limited Company for years now. Going to different contracts and meetting new contractors from time to time.

Was having a chat about Tax and IR35 and guess what, this contractor told me he does not pay no tax at all. I asked why and how does he do it. Reply was, all you have to do is buy a Ltd company use it for about 6 months and just before april, close the compmay and buy another one off the shelf and after 8 - 9 months just before the Tax period close the company and repeat the process again and again.

I was shocked but then again wondered there must be some checks in place to stop this happening. What do you guys think is it cool or outright doddgy.

As to be hornest this is begining to appeal to me but first let me read what other poepl here have to say to that first.

As many advice o this is appreciated. Thanks all

[VectraMan]

Yeah that'll work.

[BrilloPad]

Hi folks,

Have been contracting through my Limited Company for years now. Going to different contracts and meetting new contractors from time to time.

Was having a chat about Tax and IR35 and guess what, this contractor told me he does not pay no tax at all. I asked why and how does he do it. Reply was, all you have to do is buy a Ltd company use it for about 6 months and just before april, close the compmay and buy another one off the shelf and after 8 - 9 months just before the Tax period close the company and repeat the process again and again.

I was shocked but then again wondered there must be some checks in place to stop this happening. What do you guys think is it cool or outright doddgy.

As to be hornest this is begining to appeal to me but first let me read what other poepl here have to say to that first.

As many advice o this is appreciated. Thanks all

What does he do with the money in the company? Pay it out as some sort of share distribution (which counts as capital gains?)?

[moorfield]

Was having a chat about Tax and IR35 and guess what, this contractor told me he does not pay no tax at all. I asked why and how does he do it. Reply was, all you have to do is buy a Ltd company use it for about 6 months and just before april, close the compmay and buy another one off the shelf and after 8 - 9 months just before the Tax period close the company and repeat the process again and again.

Bollox.

[NotAllThere]

Evasion - and illegal.

[tim123]

Evasion - and illegal.

I think that it just plain doesn't work.

tim

[xoggoth]

Somebody I know claims 96p a mile on his car.

[DaveB]

What does he do with the money in the company? Pay it out as some sort of share distribution (which counts as capital gains?)?

I'm guessing he simply siphons it off into his personal account. No accounts are ever filed, no CT returns completed and no tax ever paid. He simply doesnt declare the income on his personal tax return, hence paying no tax.

Evaison, pure and simple and definately illegal.

OP could always shop him to HMRC, I belive they pay a bounty on these things. Even if they don't he should be turned in IMHO as he makes the rest of us legitimate operators look bad and perpetuates the image of the tax dodging contractor.

[chris79]

Somebody I know claims 96p a mile on his car.

You can claim what you want for your car, 96p is fine. The problem is when you do self assessment it asks you how many miles you claimed etc, and how much was paid then works out the difference between 40p and 96p in tax owed.

I mistakenly paid myself 49p a mile (at the advice of my accountant) last year, and ended up with a small tax bill on SA to cover the overpayment. All fixed!

[VectraMan]

No accounts are ever filed, no CT returns completed and no tax ever paid. .

HMRC/Companies House are going to come after you sooner or later for final accounts, even on a closed company.

This guy is either lying, deeply stupid, or a criminal.