Payschemeplus / Talent Resource Mnagement TRM

**flaphead** · 21 February 2007, 12:07

RE: Payschemeplus / Talent Resource Mnagement TRM

Did you ever get any reply.

I am about to start contacting too and have been recommended Talent

**Cowboy Bob** · 21 February 2007, 12:14

These are MSCs so after April you are going to be clobbered tax-wise if you use them to the point of it making no difference to if you were going PAYE. The ONLY way to make more than standard PAYE after April is to run your own Ltd.

**flaphead** · 21 February 2007, 12:28

Payschemeplus / Talent Resource Mnagement TRM

Interesting as the way it would seem they work is that you get a base salary that has tax and NI deducted.

You then get a "loan" for the remainder that you pay interest on (not really but that is how is works)

So does this still make them a MSC?

This will be the first time I have contacted to I am non the wiser

**flaphead** · 21 February 2007, 12:45

Batchworth Management

Okay this is the reply I have just had from them ... looks like a "stock" reply:

Thanks for your email with concerns over the revised legislation outlined in the Chancellors prebudget speech.

Having reviewed the Inland Revenue report, we understand fully how the changes will impact the industry. Our tax consultants have concluded that our structures are robust and our services will be unaffected by the proposed changes due to take place in April 2007.

The upcoming changes in legislation were aimed at UK companies providing traditional composite and managed service solutions where expenses are paid under P11'D rules and where dividends attract 19% corporation tax. As you are no doubt aware your employment is with Talent Resource Management Ltd , based off-shore in Guernsey , and you receive a loan payment as opposed to a taxable dividend . Therefore these changes will not effect you ,your status remains intact in respect to IR35 and there will be no changes in our services and arrangements with you.

Futhermore, Gordon Brown's 11th pre-budget report is focused on UK based MSC's using disgused employment with a dividend option and business expenses. April 2007 will enforce change to remove business expenses, resulting in contractors operating through Private Service Company's (PSC's).

Batchworth is not legislated under the 11th pre-budget report as:
1) Employment is outside of the UK.
2) Outside IR35 as you are employed
3) We use a loan route not a dividend
4) Business expenses are not used as part of our structure (subsistence).

Payscheme fully complies with the guidelines set. As the lastest report focuses on UK based traditional Ltd companies services, we are operating within the grey areas of legislation not regulated.

This means that there is no change to how we operate. This may change again in the near future, however we will comply and let you know.

I hope this helps to ease any worries you may have; understandably it is always unsettling whenever the Revenue decides to implement such wide-reaching changes.
From our position we are expecting a dramatic rise in interest in Payscheme Plus, from contractors currently using structures that will be impacted by these changes - if I can be of any help to your colleagues looking for a compliant alternative please do not hesitate to pass on my contact details. Please also remember that we do offer a referral bonus for any extra business that you put our way ......

**Cowboy Bob** · 21 February 2007, 12:46

Originally posted by flaphead

Interesting as the way it would seem they work is that you get a base salary that has tax and NI deducted.

You then get a "loan" for the remainder that you pay interest on (not really but that is how is works)

So does this still make them a MSC?

This will be the first time I have contacted to I am non the wiser

MSC = Managed Service Company. ie. they are managing your services. The set-up of them is irrelevent.

Besides, what happens if they go bust and the liquidators want their "loan" back? Yes, you would owe it as you would be a legal debtor. That should be enough to make you steer well clear.

**Cowboy Bob** · 21 February 2007, 12:48

Originally posted by flaphead

1) Employment is outside of the UK.

Rubbish. Unless you are physically working in Guernsey you are UK tax resident and therefore owe the tax here.

**tim123** · 21 February 2007, 14:26

Originally posted by Cowboy Bob

Rubbish. Unless you are physically working in Guernsey you are UK tax resident and therefore owe the tax here.

I'm inclined to agree.

If having your office offshore got around the new rules, then all the MSC operators would have to do is move their office offshore.

I must say that I don't think that closing down of offshore schemes was the intention of the legislation, but it could be a consequence. The moving of the tax liability to <whoever in the chain that the IR can reach> could mean that agents won't touch people wanting to work through these companies at all, in the future.

tim

**oraclesmith** · 21 February 2007, 14:57

There are three spelling mistakes in the letter that flaphead received, so I would stay well clear of them.

Let's face it, these schemes are very obviously contrived to avoid tax and by sticking the proverbial two fingers up at HMRC they're going to attract their attention.

**flaphead** · 21 February 2007, 16:17

Going Bust

So the reply to this I have is:

The loan is not a real loan, so you are not required to pay back something that you did not owe us in the first place.

Payschemeplus / Talent Resource Mnagement TRM