Reply to: Offshore clarification

[NadJ]

Not necessarily - an easy tax inspection for Hector would be to examine the agency, find a contract with your name and your offshore limited's name on it, they'll put two and two together. If you make it difficult to prove that you're a director (shadow or otherwise) Hector will simply assess you personally and make you prove that you're not liable - this puts all the onus back onto yourself to provide proof.

Are your comments based on what you think will happen or what you know happens? I.e. based on someone elses or your own experience?
If it is based on a real life situation. Then as you say:

Yes, to make an example of you to others.

...presumably, HMRC should have this exact scenario illustrated clearly somewhere?

[meridian]

Do you really think they will go to such length just to get few thousand of pounds ???

Yes, to make an example of you to others.

Surely, it must cost more to invetigate.

Not necessarily - an easy tax inspection for Hector would be to examine the agency, find a contract with your name and your offshore limited's name on it, they'll put two and two together. If you make it difficult to prove that you're a director (shadow or otherwise) Hector will simply assess you personally and make you prove that you're not liable - this puts all the onus back onto yourself to provide proof.

[NotAllThere]

Do you really think they will go to such length just to get few thousand of pounds ??? Surely, it must cost more to invetigate.

Of course not. But that wasn't the question.

For a while now I have been trying to understand why/if it is illegal to use an offshore corporation.

It's only illegal if you use it for some criminal activity - like money laundering or tax evasion.

NotAllThere

[Zilver]

Offshore or not

For a while now I have been trying to understand why/if it is illegal to use an offshore corporation. Personally I contract in different european contries, so to me it makes sense to use an offshore company to work through.
I still do not understand if it is indeed illegal to use a chain like:
Client -> UK Agency -> UK Ltd -> Your favourite Caribbean Corporation.

Has anyone talked to an accountant who can answer this question? (and not just one of the many who will try to sell you "offshore corporation services")

Kind Regards,
Zilver

[ElectricChair]

Do you really think they will go to such length just to get few thousand of pounds ??? Surely, it must cost more to invetigate.

dont forget they charge interest of 7% a year on any back-tax

[PAG]

A lot depends on the relationship between the UK and foreign country. If Hector can't find out that you are a director, but suspects you are, you could face a lengthy investigation, and possibly criminal charges.

NotAllThere

Do you really think they will go to such length just to get few thousand of pounds ??? Surely, it must cost more to invetigate.

[NotAllThere]

A lot depends on the relationship between the UK and foreign country. If Hector can't find out that you are a director, but suspects you are, you could face a lengthy investigation, and possibly criminal charges.

NotAllThere

[NadJ]

Where a worker is resident in the UK and the work is carried out in the UK, the intermediary (in Chapter 8) or MSC (in Chapter 9) is treated as having a place of business in the UK and, subject to other qualifying criteria, Chapter 8 and 9 do apply."

Another question. Say that the agency/client elected to obtain the services of an individual directly through an Offshore Ltd (Thereby avoiding the UK Ltd company). The worker is resident in the UK - Yes. However, the worker can't be proven to be the director of the offshore company, so can he be made liable for taxes on the total payments paid to the offshore company?

Curious.

[exbrm]

Latest from HMRC website:

http://www.hmrc.gov.uk/employment-st...egislation.htm

"Some offshore arrangements claim that Chapter 8 (IR35) and Chapter 9(MSCs) do not apply in offshore locations. Such statements are misleading. Where a worker is resident in the UK and the work is carried out in the UK, the intermediary (in Chapter 8) or MSC (in Chapter 9) is treated as having a place of business in the UK and, subject to other qualifying criteria, Chapter 8 and 9 do apply."

It could never be that easy...........

[Davey78]

If your offshore has a UK address (in truth a virtual address, with mail and phone call forwarding), the only other way an agency can tell if a company is an Offshore Ltd is by inspecting the company registration certificate. How many agencies ask to see your certificate when you contract with them? I'm in my 4th contract in 2 years and so far not one agency asked to see my UK Ltd certificates.

My current (and only) contract required me to show a copy of the Certificate of Incorporation and a report from Companies House proving that I am a director (and thus able to sign the contract of behalf of my Limited company). So it does happen.

[NadJ]

If your offshore has a UK address (in truth a virtual address, with mail and phone call forwarding), the only other way an agency can tell if a company is an Offshore Ltd is by inspecting the company registration certificate. How many agencies ask to see your certificate when you contract with them? I'm in my 4th contract in 2 years and so far not one agency asked to see my UK Ltd certificates.

Many people pussyfoot about when answering this simple question:

Money that goes, for example, into the Panama bank account of a Panama based company is subject to UK tax under what circumstances?

Is it:

A.) When that money is "brought" to the UK
B.) If the Director of the company is UK resident.

If it cannot be proven you are the director of the said company, then then only other way of HMRC determining you are not benefiting from your worldwide income is by proving you're spending the money beyond your means. And if you don't spend the money, then this fact cannot be proven either?

...Which means you have successfully AVOIDED or EVADED the UK tax system?

Simple answers please.

[Flat Eric]

...
I have voted tory ever since I could vote
...

That makes two of us

[ElectricChair]

Thats the second time in my life Ive been called a commie. 1st time was for daring to suggest that torys had no chance in 2005 election. Turns out my accuser had voted labour in 1997 - I have voted tory ever since I could vote in 1983.

But I wont be voting tory this time - have not decided yet between liberal, bnp or monster raving looney.

[Flat Eric]

Pls read all of my posts. If I was Hector, wouldn't you think that I'd be clued up about this...

Sheesh, this place is becoming more McCarthy-ite by the minute...

I'll start the ball rolling..

"ElectricChair... YOU ARE A COMMIE..!!...."

Now if you wouldn't mind answering my questions

[ElectricChair]

I was curious about how they operate.. I'm not trying to slag them off or pick holes ..

So givem that you operate through one, have I got it broadly right...

In effect the UK LTD is effectively a "finder" in the relationship ?

M.

but why are you curious? if you are considering one then fine.

Are you Hector?