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Optima Professional / SP-Management / First 4 Lawyers

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    Optima Professional / SP-Management / First 4 Lawyers

    Hi All,

    I’m new to using someone for my accounting and I’m about to take on a new contracts and was looking to go Limited.
    I have found a company Optima Professional who essentially will handle all of my LTD stuff, book keeping invoicing ETC and work on what I can see is a EBT method for paying me.

    What I don’t understand is, is this legal? – I’m no Tax expert but I really am worried. They have offered to do all of the LTD registration for me and cover the cost of this. Has anyone dealth with First 4 Contractors or SP-Management before and able to offer any light on whether this method of book keeping is legitimate?

    Essentially they I will set up a new business account for when I go limited and I will continue to invoice my clients they will then calculate on my invoices how much money they need to invoice me, I will be paid £11,000 from my business account as a salary and then essentially sent money via a Trust. Here is an example which has been sent over for £40,000 per year.

    Gross Value: £40,000
    Dividends: £2,000
    Retainer: £11,000
    Discretionary Loan Award: £20,600
    smartPAY Take HomeL £33,600

    Any feedback on this company would be great. thank you.
    Last edited by Kyias; 5 November 2015, 13:08.

    #2
    Originally posted by Kyias View Post
    ...
    What I don’t understand is, is this legal? – I’m no Tax expert but I really am worried. ...
    You should be worried. It is legal in that it isn't criminal fraud (yet), but it is highly likely to land you with a tax bill + interest + penalties.

    Do not walk away. RUN! Do not get someone else to touch with a bargepole.
    Down with racism. Long live miscegenation!

    Comment


      #3
      Thank you, anyone else input would be good too. The more the merrier to force me away from this idea.

      What has really stumped me is the Abuse of company names and lack of them being real companies and more branding of other companies etc etc.

      w ww.smartpayaccounting.com/
      w ww.sp-management.com/ Superior Property Management
      w ww.optimaprofessional.co.uk
      http:/ /first4contractors.co.uk

      These are the 4 connected companies, I just don't understand the method fully. If its ok to do, they why should people do EBT?

      Comment


        #4
        Originally posted by NotAllThere View Post
        You should be worried. It is legal in that it isn't criminal fraud (yet), but it is highly likely to land you with a tax bill + interest + penalties.

        Do not walk away. RUN! Do not get someone else to touch with a bargepole.
        What NAT said +1

        EBT's are under fire from HMRC. They have just won on appeal against Rangers Football Club, and while the details have still be be thrashed out you can expect them to go after any other EBT schemes they can find.
        It's your call, but for the sake of what amounts to a couple of thousand pounds a year at most, you are far better off going down the standard Ltd Co. approach with a regular accountant.
        Their sample figures also look wrong in that from next year the optimum dividend would be £5000 to make the most of the allowance under the dividend tax regime.
        It also doesn't appear to account for VAT since you wouldn't be VAT registered under an EBT scheme (I think).

        To compare with running as a conventional Ltd

        Gross contract value : £40,000 + VAT = £48000

        Value after VAT on the Flat Rate Scheme @ 14% = £42105

        Expenses @10% = £4210

        Salary = £11,000

        Taxable profit (Gross value less expenses and salary) = £26895

        Corporation tax on profits @20% = £5379

        Profits available as dividend after tax = £21516

        Total in your pocket after tax =

        Salary = £11000
        Dividend = £21516

        = £32,516

        Using the EBT you gain £1084 and a lot of risk and liability.

        Figures may vary by a few hundred depending on your expenses but not a lot.

        From next year you will pay 7% tax on dividends over £5000 so it changes the number a little but not a huge amount.

        Dividend allowance = £5000

        Tax on remaining Dividend @ 7% on £16516 = £1156

        Take home = £31360
        Last edited by DaveB; 5 November 2015, 12:15.
        "Being nice costs nothing and sometimes gets you extra bacon" - Pondlife.

        Comment


          #5
          Originally posted by Kyias View Post
          Hi All,

          I’m new to using someone for my accounting and I’m about to take on a new contracts and was looking to go Limited.
          I have found a company Optima Professional who essentially will handle all of my LTD stuff, book keeping invoicing ETC and work on what I can see is a EBT method for paying me.

          What I don’t understand is, is this legal? – I’m no Tax expert but I really am worried. They have offered to do all of the LTD registration for me and cover the cost of this. Has anyone dealth with First 4 Contractors or SP-Management before and able to offer any light on whether this method of book keeping is legitimate?

          Essentially they I will set up a new business account for when I go limited and I will continue to invoice my clients they will then calculate on my invoices how much money they need to invoice me, I will be paid £11,000 from my business account as a salary and then essentially sent money via a Trust. Here is an example which has been sent over for £40,000 per year.

          Gross Value: £40,000
          Dividends: £2,000
          Retainer: £11,000
          Discretionary Loan Award: £20,600
          smartPAY Take HomeL £33,600

          Any feedback on this company would be great. thank you.
          You are aware you are on the "HMRC Scheme Enquiries" thread, right?
          You might want to check this thread, too.
          As the poster above recommended, stay clear of these structures, unless you are a masochist - because you'll end up in a world of pain, 100% guaranteed.
          Help preserve the right to be a contractor in the UK

          Comment


            #6
            I have been in touch and they seem to insist that they do not run a EBT system,

            I received this feedback


            EBT’S
            We are quite different to the EBT type of scheme you refer too and quite rightly may have read articles that raise concerns. An EBT (Employment Benefit Trust) relates to effectively being Falsely Employed and receiving disguised remuneration by being Employed and also links into IR35. And more importantly old DOTAS products.

            Our solution is not considered to be a notifiable proposal or arrangement because it does not have any of the relevant hallmarks of a tax avoidance scheme. There is no confidentiality from HMRC or other promoters, there is no premium fee, there is no off market terms, it is not a mass marketed standardised product, it does not create losses, it does not involve pensions, and it does not involve leasing arrangements. Finally, the primary purpose of the arrangements is to provide workers with a vehicle through which they can work to provide services to clients that is convenient for them and which takes away the administration hassles of business/limited companies i.e. it demonstrates commerciality.

            The disguised remuneration legislation is relevant to employment income only, not self-employment income. Also, it is not EBT’s that do not work, it is how long they have been used and abused in the past.

            Difference between ourselves and an EBT?
            The prefunded Trust is funded prior to discussions with the end client and has a pre-set limit for example £150,000 made available for the client’s benefit.

            An EBT is an employee’s benefit trust and caught up in the 2011 Finance Act. Legacy EBTs are not recommended or used by ourselves.

            Our solution has been designed to fully comply with all current and upcoming legislation. The group employ some of the leading tax experts in the country who continually monitor changes in legislation to ensure all our of consultants work in a compliant manner. Moreover, the solution has been fully reviewed and backed up by Queens Counsel opinion. The solution is not affected by GAAR or registered for DOTAS.

            Everything we do is absolutely legitimate, compliant and lawful. If it wasn’t, we wouldn’t be where we are today. To confirm in writing - We make a pledge to our clients that if they are challenged by HMRC in relation to the solution, we will support those clients up to and including 1st Tier Tribunal to defend their case. If you were to become a client, this would extend to you. It’s worth noting that as a result of the robust planning and vast financial investment we put into our compliance teams, this has never had to be implemented, as none of our clients have ever been challenged by HMRC in relation to the solution.

            It’s a PAYG service essentially, you’re not tied in to use our services for any amount of time. By all means, you can see how things work with ourselves – and if for whatever reason you wished to leave our service, you could take your Ltd Company elsewhere. If we don’t have an invoice to work with, and you don’t transfer the funds to ourselves, we can’t implement the planning.

            Any thoughts? - Still stay away? I have a meeting with an accountant tonight to discuss also.

            Comment


              #7
              Originally posted by Kyias View Post
              Thank you, anyone else input would be good too. The more the merrier to force me away from this idea.
              You've posted in a section dedicated to people struggling with this and one of our moderators has told you straight... What more do you want?

              How about looking at their privacy policy... Link at the bottom of the page... What does that tell you? You happy with that?

              And a little more feedback about Optima as already discussed on here...

              http://forums.contractoruk.com/accou...ml#post2150737

              Is that enough or do you still want one of us to say Fill your boots?
              Last edited by northernladuk; 5 November 2015, 13:25.
              'CUK forum personality of 2011 - Winner - Yes really!!!!

              Comment


                #8


                There is a reason why these schemes exist and why the dodgy providers are surviving. If smart IT consultants can fall for this, I can only say, greed is powerful.
                Vote Corbyn ! Save this country !

                Comment


                  #9
                  Originally posted by Kyias View Post
                  I have been in touch and they seem to insist that they do not run a EBT system,

                  I received this feedback


                  EBT’S
                  We are quite different to the EBT type of scheme you refer too and quite rightly may have read articles that raise concerns. An EBT (Employment Benefit Trust) relates to effectively being Falsely Employed and receiving disguised remuneration by being Employed and also links into IR35. And more importantly old DOTAS products.

                  Our solution is not considered to be a notifiable proposal or arrangement because it does not have any of the relevant hallmarks of a tax avoidance scheme. There is no confidentiality from HMRC or other promoters, there is no premium fee, there is no off market terms, it is not a mass marketed standardised product, it does not create losses, it does not involve pensions, and it does not involve leasing arrangements. Finally, the primary purpose of the arrangements is to provide workers with a vehicle through which they can work to provide services to clients that is convenient for them and which takes away the administration hassles of business/limited companies i.e. it demonstrates commerciality.

                  The disguised remuneration legislation is relevant to employment income only, not self-employment income. Also, it is not EBT’s that do not work, it is how long they have been used and abused in the past.

                  Difference between ourselves and an EBT?
                  The prefunded Trust is funded prior to discussions with the end client and has a pre-set limit for example £150,000 made available for the client’s benefit.

                  An EBT is an employee’s benefit trust and caught up in the 2011 Finance Act. Legacy EBTs are not recommended or used by ourselves.

                  Our solution has been designed to fully comply with all current and upcoming legislation. The group employ some of the leading tax experts in the country who continually monitor changes in legislation to ensure all our of consultants work in a compliant manner. Moreover, the solution has been fully reviewed and backed up by Queens Counsel opinion. The solution is not affected by GAAR or registered for DOTAS.

                  Everything we do is absolutely legitimate, compliant and lawful. If it wasn’t, we wouldn’t be where we are today. To confirm in writing - We make a pledge to our clients that if they are challenged by HMRC in relation to the solution, we will support those clients up to and including 1st Tier Tribunal to defend their case. If you were to become a client, this would extend to you. It’s worth noting that as a result of the robust planning and vast financial investment we put into our compliance teams, this has never had to be implemented, as none of our clients have ever been challenged by HMRC in relation to the solution.

                  It’s a PAYG service essentially, you’re not tied in to use our services for any amount of time. By all means, you can see how things work with ourselves – and if for whatever reason you wished to leave our service, you could take your Ltd Company elsewhere. If we don’t have an invoice to work with, and you don’t transfer the funds to ourselves, we can’t implement the planning.

                  Any thoughts? - Still stay away? I have a meeting with an accountant tonight to discuss also.
                  So for the sake of a grand or so, you essentially want to do all the work and earn the money, then give it all to someone else in the Isle of Man so that they can give most of it back to you without you paying any tax on it?

                  You might also want to take into account that Optima Professional are part of the same group as AML (AML registered the website and their office address is in the registration details.) and we also have this long running thread specifically about them.

                  http://forums.contractoruk.com/hmrc-...on-letter.html

                  Ignore the typo in the thread title, the OP makes it clear it is AML further down the thread. Lots of people getting very large bills from HMRC years after they used the schemes.
                  "Being nice costs nothing and sometimes gets you extra bacon" - Pondlife.

                  Comment


                    #10
                    Sniff test

                    If you get to keep more than 80% of the money, it's dodgy, no matter what the salesman says.

                    Comment

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