Touchstone Business Development

[DavidSC]

They look suspect to me and don't seem to check out...

I received a phone call and email from these guys and ran it past my accountant. She noticed the disclaimer on the 'Business Illustration' which stated

".. you are not able to become a beneficiary of this Trust."

So they want me to pay into a Trust that I cannot be a beneficiary of - yeah, sure sign me up and take my money!

I also hovered over the website url in the email they sent me and oddly it does not go directly to their website but here: http://e mail.touchstonebd.co.uk/c/e...uylHARomB62Olj[and a lot more of this id]. Looks like a standard 'who clicked me' tracking URL which I find a little underhanded.

With Companies House giving me it's frustratingly frequent '502 Bad Gateway' error I did managed to locate some information here: https://www.companysearchesmadesimpl...pment-limited/

This is the only listing I can find for a company of that name and shows that the company was dissolved in 2000.

All decidedly dodgy and I will be declining their kind offer to give them my money ;-)

[SlipTheJab]

Touchstone Business Development

If you want to discuss this I would suggest to find an investors forum. They won't be so fussy will have a greater risk appetite.

Does he want to exchange a cow for 5 magic beans while he's here?

[cojak]

Touchstone Business Development

If you want to discuss this I would suggest you find an investors forum. They won't be so fussy will have a greater risk appetite.

[MrMarkyMark]

Well, I think they are bloody ace

Go for it seems like a golden opportunity, ignore the haters

[malvolio]

Can someone with some actual experience of these guys, or at least of a comparable scheme (i.e. one that exploits this trust relationship to avoid tax) explain what is actually the level of risk here, what would happen if HMRC caught up with them to find them operating outside of what was intended by the law and what the ramifications might be for a participant?

"Don't be greedy and take it from me that it's not worth it" isn't super helpful, and tbh if your goal is to help other contractors by dissuading them it isn't going to do a very good job. Equally, taking that example from the email infers the wrong intention entirely for their business model, so to say it is about kick backs from agencies misses the point entirely.

I think their email is intentionally vague because of the nature of the workaround. I received the same email, and have actually spoken to them on the phone a couple times where they have been a little more forthcoming about what the model entails:

What they described to me was that you set up a trust, and name their associates who they tell you about as the beneficiaries. You put some money in that trust, and they pay you out 84% of that, which comes from other people in their network who have named you as beneficiaries on their trust. Their role is to facilitate this network and exploit this loophole, and their supporting team and their administration absorbs that remaining 16%

If that's what's actually happening then I'm totally fine with that. You control how much you put in the trust, so if you start small and you don't get your 84% back then you've not really lost anything.

I'm just trying to get a real understanding of what the risks and impacts could be, to determine whether I take a punt on it.

If someone could help out with some proper facts and an open discussion on stuff like this, I would really appreciate it.

Thanks

The tax doesn't just disappear. If you manage to escape HMRC for the rest of your life they will still see it as a taxable income since you have the use of the income from the trust. Then when you die your relatives get hit with a bill for the "avoided" tax plus interest from your estate. That's one reason why there has been worries about IHT in the threads about EBTs

Of course that won't happen. You'll be served with an APN long before that.

Or we're all talking nonsense and it's all perfectly fair and above board. In fact, I wonder why I'm not doing it already.

[Alan @ BroomeAffinity]

Sounds great. Have a bash. What could possibly go wrong? Let us know how you get on.

[cojak]

Can someone with some actual experience of these guys, or at least of a comparable scheme (i.e. one that exploits this trust relationship to avoid tax) explain what is actually the level of risk here, what would happen if HMRC caught up with them to find them operating outside of what was intended by the law and what the ramifications might be for a participant?

"Don't be greedy and take it from me that it's not worth it" isn't super helpful, and tbh if your goal is to help other contractors by dissuading them it isn't going to do a very good job. Equally, taking that example from the email infers the wrong intention entirely for their business model, so to say it is about kick backs from agencies misses the point entirely.

I think their email is intentionally vague because of the nature of the workaround. I received the same email, and have actually spoken to them on the phone a couple times where they have been a little more forthcoming about what the model entails:

What they described to me was that you set up a trust, and name their associates who they tell you about as the beneficiaries. You put some money in that trust, and they pay you out 84% of that, which comes from other people in their network who have named you as beneficiaries on their trust. Their role is to facilitate this network and exploit this loophole, and their supporting team and their administration absorbs that remaining 16%

If that's what's actually happening then I'm totally fine with that. You control how much you put in the trust, so if you start small and you don't get your 84% back then you've not really lost anything.

I'm just trying to get a real understanding of what the risks and impacts could be, to determine whether I take a punt on it.

If someone could help out with some proper facts and an open discussion on stuff like this, I would really appreciate it.

Thanks

Well we DO just talk about dissuading people because we have a whole forum of people worried about how they are going to pay HMRC.

If you want straight advice, read this http://forums.contractoruk.com/hmrc-...following.html

[Mr Cool Ice]

Details please?

Can someone with some actual experience of these guys, or at least of a comparable scheme (i.e. one that exploits this trust relationship to avoid tax) explain what is actually the level of risk here, what would happen if HMRC caught up with them to find them operating outside of what was intended by the law and what the ramifications might be for a participant?

"Don't be greedy and take it from me that it's not worth it" isn't super helpful, and tbh if your goal is to help other contractors by dissuading them it isn't going to do a very good job. Equally, taking that example from the email infers the wrong intention entirely for their business model, so to say it is about kick backs from agencies misses the point entirely.

I think their email is intentionally vague because of the nature of the workaround. I received the same email, and have actually spoken to them on the phone a couple times where they have been a little more forthcoming about what the model entails:

What they described to me was that you set up a trust, and name their associates who they tell you about as the beneficiaries. You put some money in that trust, and they pay you out 84% of that, which comes from other people in their network who have named you as beneficiaries on their trust. Their role is to facilitate this network and exploit this loophole, and their supporting team and their administration absorbs that remaining 16%

If that's what's actually happening then I'm totally fine with that. You control how much you put in the trust, so if you start small and you don't get your 84% back then you've not really lost anything.

I'm just trying to get a real understanding of what the risks and impacts could be, to determine whether I take a punt on it.

If someone could help out with some proper facts and an open discussion on stuff like this, I would really appreciate it.

Thanks

[LondonManc]

[MPwannadecentincome]

yet these companies are still in business so somebody must be signing up....

[eek]

If you want to see what the end result of this scheme and your greed is look at any of the threads within HMRC Scheme Enquiries

HTH BIDI

[MrMarkyMark]

Touch stone?

I would rather touch myself

[RSoles]

If the agency/client at some stage in the future receives a cash bonus from the Trust, is it more likely or less likely that the agency/client would look upon you and your Company favourably when it comes to awarding future contracts or increased day rates?

Or you could just take a lower day rate and improve their margin.
This is at best bollox. Avoid.

[NotAllThere]

TL;DR (If I understand correctly) - set up a trust using your company funds. Make your favourite clients and agencies beneficiaries. You give them money from the trust. They give you higher rates/more work.

Sounds like kick-backs and bribes to me.

[LondonPM]

Hi

Has anyone come across Touchstone before?
I was approached by them with the following proposition...

Most directors pay themselves via salary and dividends, resulting in high corporation and dividend tax bills, with no funds being used to benefit the future trade of their business.

We at Touchstone Business Development have shown numerous companies how to use their profit to potentially benefit the future trade of their business, without the need for any funds to go offshore, whilst simultaneously reducing their Corporation Tax liability.

The Business Development model was grounded in the Companies Act.

Chapter 10, section 172 part (c) states:

“A director of a company must act in the way he/she considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to—
(c)the need to foster the company's business relationships with suppliers, customers and others”

As a result, since 1925 (Atherton v British & Helsby Cables Limited 10 TC 155) to the present, HMRC and the Courts have accepted that cash contributions to Business Trusts which are in principle made “wholly and exclusively” for the purposes of improving the trade of the business, are accepted as deductible against the taxable profits of the contributing company.

As such, a formal relationship can be created between your Ltd Company and an established Business Development Trust by signing a legal document called a Deed of Adherence. As the Director of your Ltd Company you will be asked by the Trust to name a number of clients and suppliers that are contributing to the success of your Company. These companies can therefore be named as potential beneficiaries on the Trust Deed.

The Trust has full discretion over any asset/funds received and can choose to make payments to any named beneficiaries. As the potential beneficiaries are clients and suppliers of your company it is reasonable to suggest that the money your Ltd Company has contributed into the trust has been done so “wholly and exclusively” for the purposes of improving the trade of the business – which is exactly what the Companies Act compels you as director to do.

As a hypothetical example, a company that could be contributing to your Company’s success could be your agency or client – they pay you after all. Therefore, they could be named as one of the potential beneficiaries. If the agency/client at some stage in the future receives a cash bonus from the Trust, is it more likely or less likely that the agency/client would look upon you and your Company favourably when it comes to awarding future contracts or increased day rates?

The answer is obvious and this method of benefitting trade has been successfully used by tens of thousands of UK Companies for decades.

Any funds that your Ltd Company contributes to a Trust are treated exactly the same as any other business expense whereby the expense will reduce the profit of the company meaning no corporation tax is due on that amount. The amount contributed to Trust is denoted as an Administrative Expense on the company tax return in an open and transparent fashion with HMRC as has been the case for decades.