New scheme doing the rounds

[Loan Ranger]

You have two employers, a UK company and a German company. Most of the remuneration is received as tax free expenses (Per Diem) from the German company. Supposedly this is allowed because it's an offshore employment.

There's a PDF flowchart here showing how it "works".

http://www.files.com/set/5a63069c6ce49

What could possibly go wrong.

[Iliketax]

You have two employers, a UK company and a German company. Most of the remuneration is received as tax free expenses (Per Diem) from the German company. Supposedly this is allowed because it's an offshore employment.

There's a PDF flowchart here showing how it "works".

View File Set | Files.com

What could possibly go wrong.

All the money is connected with your UK employment. The Germany entity is a relevant third person. The payment by the German entity is a relevant step. You'll pay employment income tax on the money from the German entity. It should be DOTAS-ed because of the employment income hallmark. GAAR will apply (100% penalties). It's offshore so there is requirement to correct / failure to correct for the past (200% penalties). You won't collect £200? No lube will be supplied.

Did I get it right?

[webberg]

I would find it impossible to advise a client that the arrangement had any realistic prospect of achieving its aims.

[BrilloPad]

I would find it impossible to advise a client that the arrangement had any realistic prospect of achieving its aims.

I could advise a client such a scheme would achieve its TRUE aim.

Fleecing the gullible of their cash. Safe in the knowledge that some people will do NO research first. And when the fraud is reported to HMRC, they will do nothing. And if the net ever closes in, they can clear off safe in the knowledge they cannot be touched. Rinse and repeat.

Such people are the 2nd lowest of the low. The lowest are of course HMRC themselves.

[SeanT]

All the money is connected with your UK employment. The Germany entity is a relevant third person. The payment by the German entity is a relevant step. You'll pay employment income tax on the money from the German entity. It should be DOTAS-ed because of the employment income hallmark. GAAR will apply (100% penalties). It's offshore so there is requirement to correct / failure to correct for the past (200% penalties). You won't collect £200? No lube will be supplied.

Did I get it right?

Bugger me you really do like tax don't you

[SimonJones]

RT scheme

I've heard about Remuneration Trust schemes operated via a limited company where they pay less corporation tax amongst other benefits - are these genuinely legal, just dosen't make sense. Has anyone come across these schemes?

[Iliketax]

I've heard about Remuneration Trust schemes operated via a limited company where they pay less corporation tax amongst other benefits - are these genuinely legal, just dosen't make sense. Has anyone come across these schemes?

Was it this one? https://www.gov.uk/guidance/income-t...g-spotlight-40

[webberg]

I've heard about Remuneration Trust schemes operated via a limited company where they pay less corporation tax amongst other benefits - are these genuinely legal, just dosen't make sense. Has anyone come across these schemes?

We have examples in our files of such a scheme.

We believe that this type of scheme has a number of difficulties and we have recently seen HMRC issue Reg 80's on them.

It is worth mentioning that the promoter sees absolutely no issues and produces some very bullish statements and responses to HMRC that might best be described as "robust".

Time will tell.

Certainly we will not recommend any client use this type of scheme.