Reply to: umbrella company woes!!

[tim522004@yahoo.co.uk]

For Malvolio!

My comments are accurate.

My third paragraph makes reference to the change of legislation in favour of the Revenue, not in favour of the taxpayer. Yes the legislation will reflect the Artic case but I was'nt talking about that. I'm talking about the Revenue changing the legislation later on to aid themselves NOT the taxpayer. You obviously did'nt undersand the context of what I was talking about. I'm sorry I did'nt make myself clear enough.

Just for the record my comments were taken straight from a Chartered Tax Advisors publiation, in fact the article was written by a tax advisor who asissted with the court of appeal case. So obviously you are disagreeing with
the consensus of a tax professional who maybe involved in defending you one day!

[tim522004@yahoo.co.uk]

For Bradey!

I have dealt with alot of investigations to do with EBT's!

What did you want to Know?

[expat]

Can you honestly say that claiming tax relief on things you haven’t actually incurred, could in any way, shape or form be legal????

Wel yes, actually. I have in the past worked as a salaried employee of companies that gave per diem expenses. They didn't insist on my proving what I had spent it on, and didn't give a damn if I actually spent less, or indeed more, as long as I got what the per diem was intended to provide.

I didn't ask but I imagine the company would put it down as an expense and so not pay tax on it.

[Bradley]

Sco

I have dealt with many enquires and investigations which have involved the SCO. I have been a tax consultant for 13 years and I am glad to report I haven't lost a case yet. I specialise in IR35 an offshore tax planning.

Would the SCO cases all be in connection with the use of offshore EBTs?

[Mailman]

Who do you call if you’re in a car accident?

You are already covered by your NHS payments.

Who do you call if your house has been robbed?

Paid for from your council taxes.

Do you drive on the UK roads?

Paid for from your petrol taxes.

Do your children use UK school?

Paid for out of your own pocket because local free schools are full of dumb kids!

NHS?

NHS tax.

So...where exactly does our income tax go?

Mailman

[malvolio]

What are you on about, old boy? It might be blindingly obvious what you can and can't claim from the safe haven of a brolly, because none of it applies to you anyway. However, if you're out here in the cold trying to make sense of the tax regime this God-foresaken govenrment has conjured up, it's a bit more tricky.

Anyway, nobody is saying we shouldn't pay tax - but it would be nice to know what amount of tax on what proportion of income on what basis and at what rate and under what circumstances and by whom and exactly when you are going to get a brown envelope telling you your understanding of curernt legislation no longer applies and you're in for a three year £15k investigation for no sensible reason. Understand??

[Arthur]

???confused???

Is it just me, or is it blatantly obvious????

That if you live & work in the UK, - You should pay tax??????

Who do you call if you’re in a car accident?
Who do you call if your house has been robbed?
Do you drive on the UK roads?
Do your children use UK school?
NHS?

Wake up for god sake!!!!!

Can you honestly say that claiming tax relief on things you haven’t actually incurred, could in any way, shape or form be legal????

I use a PAYE paying umbrella and only claim legitimate expenses, Even though I don’t need receipts, I can sleep at night knowing I am not going to end up with a bloody huge fine I can't afford to pay!!!

Trust me I’ve seen it happen to a lot of people! Ask them whether you should take the risk or not!!!!!!!!!

Sorry to anyone, who does only claim legitimately, it just annoys me when people try and justify it.

Arthur Thompson

[malvolio]

That is actually a misinterpretation of the current state of play as regards S660a. Despite the High Court appeal in favour of Arctic (and its clear, unanimous and unequivocal judgement that this is not how the settlements legislation is intended to be applied and if HMRC want to do what they're trying to do they should create fresh legislation), they are apparently seeking leave to appeal at the HoL. That may not be granted but that would be unusual. It is more likely that their noble Lords will allow the appeal and then throw it out. We won't know anything for a while yet anyway.

However the real bone of contention is that HMRC may refuse to treat this as a test case, which leaves the matter of costs for Arctic wide open and if they didn't have PCG and other financial backing I suspect they would not be able to contest this appeal. How HMRC can say this is not a test case when the tax in question has been universally agreed to be £7000 owed if they win (against around £300k to do the appeal itself) would indicate an intolerable level of vindictiveness on behalf of our government and, in particular, our supposed PM-in-waiting.

Legally, of course, it's still all up in the air. At the moment the law says the Arctic financial arrangements are totally correct and you can follow them However, you should have commented on your SA form that you are working on that assumption - this so that if the appeal now fails they will not be able to come after you for non-disclosure

And sorry but your third paragraph above is totally wrong - they will provide new legislation to allow the exisiting regulations to apply to the Arctic scenario and regulations, as we all know, are retrospectively applicable to Dec 2004.

Good advice is always welcome - but it's much more useful if it's correct. Do not make the mistake of thinking we don't know about or understand the tax regime applied to the contractor marketplace - after all, it's how we earn our money.

[tim522004@yahoo.co.uk]

Some more info. for the doubters!

This is some more helpful info. for those who don't like yahoo mail people.

This was a reply to someone on this website who had some queries about s660, 'settlement legislation'. If you do go ahead with your own companies as opposed to an umbrella or management company this could save you a small fortune in higher rate tax.

'The court of appeal case (not high court case, my error. I was a bit tired last night!) was Revenue V Arctic Systems Ltd. The appeal took place in Dec 2005.

The Judge stated that when the company was formed the main director/shareholder was not contractually obliged to work for the company. So any subsequent decision on the part of the company to pay less than a full market salary, or to pay out a dividend, could not be part of any arrangement that existed when the company was formed. Therefore, there was no setlement for tax purposes (ie. under s660).

The Revenue have got the option to now challenge this at the House of Lords, but they will need consent to do so; it's unlikely they will get it. Instead they will just change the law like they normally do when they have a case of 'sour grapes'! If they do change the law it is reasonable to expect that any change will not apply retrospectively.

However, everyone is safe (at present) to split there dividends/salaries with their spouses or other family members; providing they setup the company correctly at it's incorporation.

Hope this helps!'

There is a lot more where that came from!

[tim522004@yahoo.co.uk]

Sorry if I offended, but I am right!

I am sorry if my Yahoo email address is not upto scratch, it's just an e-mail! I wasn't aware that my e-mail address was a status symbol!

What i mentioned isn't a 'scam'. My client (or old client I should add, as I retired last year aged 31) has traded using this technique for 6 years. They have several hundred contractors and the reason why everyone doesn't do it is because not everyone qualifies.

As regards believing what I say, i can understand peoples concerns as I could be anyone. But I thought the idea of this website was to share ideas.

Needless to say I am a retired tax consultant. The tax bodies I belong are CTA, ITPA, AAT, ATT are but a sample. I have successfly defended several cases on IR35, s660 and other more complicated cases.

By no means would I expect anyone to take action on anything I say on a website or anybody else for that matter. I'm just answering some of your queries.

I only joined the website yesterday. It's only because my wife was putting my daughter to bed that I had some time to kill and i stumbled across this website.

Thought I could be of help.

If your wondering why a retired tax consultant would give out this advice, it's because I don't have a particular fondness for the attitude of the Revenue and the more people are aware of what you can legally do the better. Think of me as Robin Hood!

Your comments haven't discouraged me. I will keep dishing out apparently rubbish advise, but maybe someone would like to check what I say. I'll think you'll find i'm right; I did'nt retire at 31 because I was crap at what I used to do!

Will speak again soon.

[privateeye]

I have a client who employs all their contractors as employees. They employee contractors in the IT, HGV and Telecommunications industry.
The contractors (employees) are provided with payslips, contract of employment and the normal benefits of employement (ie. SSP, Holiday pay, etc). This means that IR35 is not relevant because all your taxes and NI are paid monthly via the PAYE system. However, they are able to increase your net pay by 40%. You will also get a tax refund paid by the Revenue direct into your personal account every tax year.

This company does not use any 'clever tax loop-holes' and there is no scheme to register with the Revenue; as it is not a tax saving scheme.

If the scheme was that legitimate far more companies would use it. Sounds very dodgy to me - but then again I never trust anything from a yahoo/hotmail or any free email address normally contains some sort of scam. As with most companies that set these schemes up they are immune from prosecution or financial penalty it is the contractors who acted on so called professional advice that lose in the end.

[Cowboy Bob]

2 posts... declare your interest chap..

3 now. As if anyone would seek financial advice from someone with a yahoo.co.uk address. (They wouldn't would they?)

[freshblue]

2 posts... declare your interest chap..

[tim522004@yahoo.co.uk]

A solution to your problem

I'll start by saying that the Inland Revenue are unlikely to investigate your affairs and you should certainly not admit anything to the Reveune.

As far as the Revenue is concerned everyone commits tax evasion! Tax law is a matter of interpretation and it's best not to get involved in complicated schemes. The Goverment set-up the 'tax-scheme' registration system to close all loop-holes, It was not designed to help the general public or give them confidence in advisors. It's so they get to know about clever tax saving schemes, so they can close the 'loop-holes' at the next budget!

I have dealt with many enquires and investigations which have involved the SCO. I have been a tax consultant for 13 years and I am glad to report I haven't lost a case yet. I specialise in IR35 an offshore tax planning.

I have a client who employs all their contractors as employees. They employee contractors in the IT, HGV and Telecommunications industry.
The contractors (employees) are provided with payslips, contract of employment and the normal benefits of employement (ie. SSP, Holiday pay, etc). This means that IR35 is not relevant because all your taxes and NI are paid monthly via the PAYE system. However, they are able to increase your net pay by 40%. You will also get a tax refund paid by the Revenue direct into your personal account every tax year.

This company does not use any 'clever tax loop-holes' and there is no scheme to register with the Revenue; as it is not a tax saving scheme.

If you would like any more information or have any other concerns please let me know.

[Torran]

I used Parasol and was subject to a spot check on subsistence receipts. Didn't like it at the time but understand why and feel it is justified.

I think thats fair enough. Just keep your receipts. It isn't that difficult

A few sitting around me here are playing a very dodgy game. Even after I have shown them the various threads on here