Reply to: Just starting out as a contractor...

[PhilAtBFCA]

Just staring out and thinking of offshore schemes

It is good to see that there is some sentiment against the tax avoidance schemes that are being marketed.

I would like to try and point out a few reasons to consider very carefully against choosing this route.

1. There is always a scheme promoter who gets paid whether you as the tax payer save any tax or not.
2. Schemes do go wrong, HMRC does take action. Read the forum posts on BN66 and EBT's to see what can go wrong.
3. HMRC is committed to doing everything it can to anyone who promotes their services to the self-employed/freelancer/contractor market, in every consultation document I have seen which has been released before legislation is enacted, specific examples of companies advertising " get 85%" etc have been given. (See point 8 of this blog on HMRC attacking self employed )
4. There are compliant , manageable and safe options available that in my experience are far more reliable.


I also understand how the majority of these schemes work, one of them being "marketed" here I do know the basics of and it has been constructed carefully and by advisors whim I respect.

But I still would not touch it or recommend it to a client for the reaons given above.

Summary > Its not worth it, and if you think it is, you may want to try and check that your greed is not overshadowing your intuition.

Phil

[TykeMerc]

I have been using for a while now, I would reccommend them.

Quick and easy set up!

Quit spamming, you're far too obvious. Despite appearances most of the CUK members are able to engage a braincell.

Like Mal I've looked into quite a few schemes over the years and I came to the conclusion long ago that they have no long term future.

The simple fact is that if you're UK resident and work in the UK then you're liable for UK tax. Esoteric tax planning schemes will eventually get shut down by HMRC who have already proven that they're more than willing to engage their time machine to attack the users retrospectively.
Inflated or artificial expenses are Criminal Tax Evasion.
Loan schemes run the risk that they could be proven to be tax evasion and there's nothing to stop the loans being perfectly legally recalled.
Off shore schemes are regularly being slammed shut by international tax agreements and some of them are at the least borderline or even outright criminal.

As has been said so many times before....

IF IT LOOKS TOO GOOD TO BE TRUE THEN IT IS TOO GOOD TO BE TRUE!!!!

[ANSOF]

I have been using Danbro for a while now, I would reccommend them.

Quick and easy set up!

[Fred Bloggs]

Maybe it's time that the forum admin checked the IP addresses of some of these posters to see if they're posted from the same place?

[Fred Bloggs]

Well said, RC.

[RichardCranium]

Richard - you seem to post here quite a lot

I certainly do, Mr Meades. Too much time on my hands.

can I ask how much you get paid for trashtalking about these schemes?

I get paid a lovely warm glow for screwing up shysters, Paul, topped up with a little hope that innocents won't get shafted.

Or is that behind a veil of impenetrable secrecy?

Feeling self-conscious, are we?

I came to this board as a friend of mine uses it and told me that I could get some good advice here, or at least meet some friendly helpful people.

They've only posted in TPD, then!

You can get good advice here, loads of it. But you turned up and said:

"I'm a first timer. Tell me about a particular kind of product. Oh, wow! Great product! Hey, everybody, look at this great product! Everyone who says this is not a great product is wrong!"

What were we supposed to think?

All I seem to have found is mostly a bunch of miserable toerags who spend way too much of their time on the boards and now accuse me of being an accountant!

I'm not accusing you of being an accountant. I am accusing you of being a sockpuppet of someone who comes across as a shyster.

Thanks for nothing.

You've had shedloads of advice from loads of people, FFS. What more do you want? A free advert?


If you really are a real person, create a new account on here and start all over again. You've screwed this 'Petestar1969' account up. You won't be the first person to have made a complete and utter tit of themselves on here and had to create a new identity. I did it too about 3 years ago.

[weemster]

Dunno about that, but I would be very wary of joining any scheme that is under HMRC scrutiny or is more than likely about to be. Or, come to that, any scheme that purports to allow you to work in the UK, earn money in the UK, be a UK resident and not pay UK taxes. I suppose the only good thing is that they are not likely to last long enough to run up £100k tax bills...

You earn your money any way you can at Meades and Co, but please let's be clear that such schemes are not for those who do not even begin to understand the risks of them and certainly not for newcomers to contractor world

WHS

[tino]

Richard - you seem to post here quite a lot, can I ask how much you get paid for trashtalking about these schemes? Or is that behind a veil of inpenetrable secrecy?

I came to this board as a friend of mine uses it and told me that I could get some good advice here, or at least meet some friendly helpful people.

All I seem to have found is mostly a bunch of miserable toerags who spend way too much of their time on the boards and now accuse me of being an accountant! Thanks for nothing.

there's the door, watch for it glancing your derriere on your exit

[malvolio]

Grow up. Some of us are disagreeing with you for very good reason.

BTW, I know how the schemes work. I don't use them, but nor do I talk about how they work in public: I respect NDAs as well. So why do I not use them, do you think? Could it be I have a clear and informed understanding of the level of risk and the likely penalties that would wipe out any gains made? Or am I just a wimp??

No matter, it's your money. As RC says, make sre you have some good liquid savings to hand for as long as you are in any such scheme (it won't be long, they'll likely be closed down over the next year or so) plus seven years. You're being a fool but there's no need to be a stupid one.

[Petestar1969]

There seem to be loads of these schemes coming out of the woodwork just lately, I wonder why?

Anyway, to anyone just starting out - if you earn your money in the UK and you are UK tax resident, you are subject to UK tax - joining an 'offshore' scheme will not change that fact.

Also, many companies say that they can get you a net return of up to 85% - the most common ways of achieving this is to use a tax avoidance scheme or to over-inflate your expense claims. To give you an idea, if you earn £300 per day, your expenses would need to be almost 60% of your gross income to net you 85% - about £850 per week..........possible I suppose..............

One last thing - if your take home pay is inflated by an expense claim - just bear in mind that, at some point, you may have to prove that you did actually incur all those costs and, if you can't, you will be sending a rather large cheque to those lovely people at HMR&C, up to 7 years later

Thank you, I'll bear that in mind. Or maybe I'll just go and get a job and avoid all the "hassle".

[Petestar1969]

Richard - you seem to post here quite a lot, can I ask how much you get paid for trashtalking about these schemes? Or is that behind a veil of inpenetrable secrecy?

I came to this board as a friend of mine uses it and told me that I could get some good advice here, or at least meet some friendly helpful people.

All I seem to have found is mostly a bunch of miserable toerags who spend way too much of their time on the boards and now accuse me of being an accountant! Thanks for nothing.

[LisaContractorUmbrella]

There seem to be loads of these schemes coming out of the woodwork just lately, I wonder why?

Anyway, to anyone just starting out - if you earn your money in the UK and you are UK tax resident, you are subject to UK tax - joining an 'offshore' scheme will not change that fact.

Also, many companies say that they can get you a net return of up to 85% - the most common ways of achieving this is to use a tax avoidance scheme or to over-inflate your expense claims. To give you an idea, if you earn £300 per day, your expenses would need to be almost 60% of your gross income to net you 85% - about £850 per week..........possible I suppose..............

One last thing - if your take home pay is inflated by an expense claim - just bear in mind that, at some point, you may have to prove that you did actually incur all those costs and, if you can't, you will be sending a rather large cheque to those lovely people at HMR&C, up to 7 years later

[RichardCranium]

La la la. I can't hear you. You're all wrong. I know better than all of you. I'm new so I know best.

I'll let you know if I do sign up and how it goes.

Suggestion: if you do go with them, put 25% of EVERYTHING you earn into a deposit account and DO NOT TOUCH IT for seven years.



Although I reckon you ARE Paul Meades or whatever your name is and you are just ming us.

[RichardCranium]

if these schemes are wholly supportable, morally and financially, and defensible in a court of law, why there is always an impenetrable veil of secrecy around them? And if they are really meant for high net worth individuals with multiple or highly variable income streams - which they are - why do we keep seeing people promoting them, overtly or covertly, on websites aimed at inexperienced, financially immature and moderately earning people such as you find on here?

[Fred Bloggs]

No thanks, I'm quite happy with what I have in place already. And me talking to you personally won't get it out in the public domain, will it? And I have spoken to a few providers over the years and understand most of the schemes (and the potential pitfalls) but have respected business confidentiality. I'll stick to warning people off them.

My point is, if these schemes are wholly supportable, morally and financially, and defensible in a court of law, why there is always an impenetrable veil of secrecy around them? And if they are really meant for high net worth individuals with multiple or highly variable income streams - which they are - why do we keep seeing people promoting them, overtly or covertly, on websites aimed at inexperienced, financially immature and moderately earning people such as you find on here?

Like I said, you earn your many however you can, just like all of us. Just don't expect to see any support from this side of the fence.

Well said. Couldn't have said it better myself.