Reply to: Which Accountant

[Danielsjdaccountancy]

Depending on your day rate and good tax planning you can achieve 80% in the lifetime of your Limited company anyway, that way eliminating the risk of jail!!

[malvolio]

In all of the examples there is a percentage that you get as "take home", HMRC get the rest. I'm not an accountant but the amounts seem to be at least ball-park correct.

This one is interesting though:



The worker gets 82% take home. What happens to the other 18%? Specifically, how much of this 18% goes to HMRC and how much goes to the scheme operator or some other tax jurisdiction?

It looks like the numbers are worked on £54k gross. If 15% of the gross goes to the scheme, there's £45,900 left - which don't leave much for the taxman...

The point is that the £44280 is still liable for tax at some point, even if it's on your deathbed...

[Wanderer]

In all of the examples there is a percentage that you get as "take home", HMRC get the rest. I'm not an accountant but the amounts seem to be at least ball-park correct.

This one is interesting though:

Freelancer Strategy
82.00%
£4,027.63
£44,280

The worker gets 82% take home. What happens to the other 18%? Specifically, how much of this 18% goes to HMRC and how much goes to the scheme operator or some other tax jurisdiction?

[LisaContractorUmbrella]

I asked for more information on the guarantee, and got this:
(sorry about the formatting)

"With regards to the Warranty*just to confirm*the company is based in Hong Kong.*Hong Kong*and Dubai are considered the two countries*which are the financial capitals of the world when it comes to Warranty organisations, this was an important when looking for the appropriate amount of cover necessary.*As an actual Tax Consultancy and not a mere management company, this is something that makes us*unique in the market. As you aware there are various other solutions where you can receive a similar return with no protection what so ever. Obviously no under writing company would be willing to back a solution/structure which is not compliant as this would potentially resort in both organisations having to pay out a substantial amount of money in both fees and fines. *
No other company so far, has been able to provide anything in writing (as you well*know, this would be classed as misrepresentation)*to confirm their compliancy hence why there has been a recent upturn in the number of new clients who have joined ourselves from other companies such as DeNovo Solar, Norla, Sanzar and Darwin. In the HMRC`s eyes there is a key difference in knowingly and unknowing entering into an agreement, this is we always provide everything in writing so there is an audit trail.
A qualified Tax Consultancy is in a prime position and are always proactive with regards to new rules/legislations due to*the skills and knowledge*in the*industry. We look at longevity for our clients and not treat them as a number. An example being our clients did not suffer any payments breaks or were made to sign any further documentation when the recent legislation was introduced.
At present, there are specific exclusions within the Draft Legislation of which this structure utilises and ergo negates the type of risk previously discussed. Obviously if the criteria of this legislation becomes more coagulated we would*act accordingly in sufficient time, therefore causing as little disruption*or any loss of faith with our clients. Again and example being, we have been in talks with two other companies/structures for the past 6 months to provide a sufficient substitute if necessary. "

I can find no trace of them on the internet, although I'm not sure if this is any cause for concern or not. I asked for some proof that the company actually exists and he sent me their street address and company number in Hong Kong. I asked for some more information, and they said they will get back to me.

As I thought - says absolutely nothing at all - agree with Mal on this one - if you value your cash leave well alone

[malvolio]

And just for fun, how many distortions can you see on this page?

How does it work? - Imagine Financial Security

OR this one, whcih hasn't caught up yet...

http://www.more-pay.com/how-it-works/

There are others, but you get the point

[malvolio]

The date is somewhat past 9th December 2010. That is significant because since that date, any income you get from any such arrangement is liable to assessment for full tax and NICs at tax year end. And I don't care what they say, the net is spread very wide indeed.

Go limited and stop p***ing around with stupid schemes that won't work. But hey, it's your money...

[Bosium]

I asked for more information on the guarantee, and got this:
(sorry about the formatting)

"With regards to the Warranty*just to confirm*the company is based in Hong Kong.*Hong Kong*and Dubai are considered the two countries*which are the financial capitals of the world when it comes to Warranty organisations, this was an important when looking for the appropriate amount of cover necessary.*As an actual Tax Consultancy and not a mere management company, this is something that makes us*unique in the market. As you aware there are various other solutions where you can receive a similar return with no protection what so ever. Obviously no under writing company would be willing to back a solution/structure which is not compliant as this would potentially resort in both organisations having to pay out a substantial amount of money in both fees and fines. *
No other company so far, has been able to provide anything in writing (as you well*know, this would be classed as misrepresentation)*to confirm their compliancy hence why there has been a recent upturn in the number of new clients who have joined ourselves from other companies such as DeNovo Solar, Norla, Sanzar and Darwin. In the HMRC`s eyes there is a key difference in knowingly and unknowing entering into an agreement, this is we always provide everything in writing so there is an audit trail.
A qualified Tax Consultancy is in a prime position and are always proactive with regards to new rules/legislations due to*the skills and knowledge*in the*industry. We look at longevity for our clients and not treat them as a number. An example being our clients did not suffer any payments breaks or were made to sign any further documentation when the recent legislation was introduced.
At present, there are specific exclusions within the Draft Legislation of which this structure utilises and ergo negates the type of risk previously discussed. Obviously if the criteria of this legislation becomes more coagulated we would*act accordingly in sufficient time, therefore causing as little disruption*or any loss of faith with our clients. Again and example being, we have been in talks with two other companies/structures for the past 6 months to provide a sufficient substitute if necessary. "

I can find no trace of them on the internet, although I'm not sure if this is any cause for concern or not. I asked for some proof that the company actually exists and he sent me their street address and company number in Hong Kong. I asked for some more information, and they said they will get back to me.

[TykeMerc]

I've been talking with one of their consultants, not sure if I'm allowed to mention his name so I won't, and to be honest there's a lot of jargon I don't understand involved. He told me that everything is 'above board' and that NI contributions will still be paid under the scheme they propose. They sent me a table showing how their strategy guarantees you more take-home:

From the tax tables above, you can see there is an option available to you (Freelancer Strategy)
This*strategy is an Employed structure therefore the responsibility for paying your tax & NICs is ours. Any late payments or underpayments of PAYE would be deemed our responsibility to correct. In short you could never be fined for late payment of tax, or asked to pay the difference if HMRC claimed not enough PAYE had been deducted.* Therefore in setting this strategy up, we have invested a lot of time, money and effort in due diligence as the risk essentially sits with us. By doing this we have also gained full QC approval for compliancy.

I have a former colleague who has been using them for about a year with nothing but praise for them, but I guess that doesn't really mean they're 'kosher'..

Obviously I can't comment on the little amount of info available in this thread on the validity of their structure, but a few years ago I was told something similar by a sales bod from a company called Sunday Solutions (I rejected their offer), I believe that they've since gone bust in some spectacular manner and the contractors on their schemes are now being pursued by HMRC for tax/NI and even VAT and quite a lot haven't been paid their incomes in full. There's a thread relating to that company on CUK.

82% rate retention and indemnified against any future HMRC tax claims seems vastly too good to be true. Ok I'm very cynical, but when a scheme pops up using a strategy that the whole of the rest of the tax planning industry seems to have missed I'm deeply suspicious.

[LisaContractorUmbrella]

Sure, the table formatting hasnt' come out well but hopefully you can still see the data. I can't see that it really shows anything as to how they do it though.

This is working on a 7.5Hr day @ £30/h:

Solution
Return
Monthly Take-Home
Annual Take-Home

Agency PAYE
70.79%
£3,477.18
£38,228

Agency PAYE & Employer's NICs
59.35%
£2,915.02
£32,048

Umbrella PAYE
62.91%
£3,090.22
£33,974

PSC inside IR35 - Deemed Payment
65.00%
£3,192.76
£35,101

PSC outside IR35 - Salary & Dividend
77.20%
£3,792.04
£41,690

Freelancer Strategy
82.00%
£4,027.63
£44,280

I also asked for more information on the guarantee that they offer against investigation by HMRC, can post the reply if anyone is interested but it just looks like a bunch of bumf to me with very little in the way of real information.

You're right - absolutely no information whatsoever You could ask how those figures were arrived at. Actually yes I would be interested to see the guarantee if you don't mind

[rightfluff]

I'm going to move to NW. See - http://forums.contractoruk.com/accou...confusion.html

[Bosium]

Sure, the table formatting hasnt' come out well but hopefully you can still see the data. I can't see that it really shows anything as to how they do it though.

This is working on a 7.5Hr day @ £30/h:

Solution
Return
Monthly Take-Home
Annual Take-Home

Agency PAYE
70.79%
£3,477.18
£38,228

Agency PAYE & Employer's NICs
59.35%
£2,915.02
£32,048

Umbrella PAYE
62.91%
£3,090.22
£33,974

PSC inside IR35 - Deemed Payment
65.00%
£3,192.76
£35,101

PSC outside IR35 - Salary & Dividend
77.20%
£3,792.04
£41,690

Freelancer Strategy
82.00%
£4,027.63
£44,280

I also asked for more information on the guarantee that they offer against investigation by HMRC, can post the reply if anyone is interested but it just looks like a bunch of bumf to me with very little in the way of real information.

[LisaContractorUmbrella]

I've been talking with one of their consultants, not sure if I'm allowed to mention his name so I won't, and to be honest there's a lot of jargon I don't understand involved. He told me that everything is 'above board' and that NI contributions will still be paid under the scheme they propose. They sent me a table showing how their strategy guarantees you more take-home:

From the tax tables above, you can see there is an option available to you (Freelancer Strategy)
This*strategy is an Employed structure therefore the responsibility for paying your tax & NICs is ours. Any late payments or underpayments of PAYE would be deemed our responsibility to correct. In short you could never be fined for late payment of tax, or asked to pay the difference if HMRC claimed not enough PAYE had been deducted.* Therefore in setting this strategy up, we have invested a lot of time, money and effort in due diligence as the risk essentially sits with us. By doing this we have also gained full QC approval for compliancy.

I have a former colleague who has been using them for about a year with nothing but praise for them, but I guess that doesn't really mean they're 'kosher'..

Can you post the table showing how their strategy guarantees you more take home; the comments you have posted sounds like straightforward umbrella PAYE which will not net you any more than any other PAYE umbrella.

p.s. your QC 'approval' is actually QC opinion and nothing more than that

[Bosium]

I've been talking with one of their consultants, not sure if I'm allowed to mention his name so I won't, and to be honest there's a lot of jargon I don't understand involved. He told me that everything is 'above board' and that NI contributions will still be paid under the scheme they propose. They sent me a table showing how their strategy guarantees you more take-home:

From the tax tables above, you can see there is an option available to you (Freelancer Strategy)
This*strategy is an Employed structure therefore the responsibility for paying your tax & NICs is ours. Any late payments or underpayments of PAYE would be deemed our responsibility to correct. In short you could never be fined for late payment of tax, or asked to pay the difference if HMRC claimed not enough PAYE had been deducted.* Therefore in setting this strategy up, we have invested a lot of time, money and effort in due diligence as the risk essentially sits with us. By doing this we have also gained full QC approval for compliancy.

I have a former colleague who has been using them for about a year with nothing but praise for them, but I guess that doesn't really mean they're 'kosher'..

[LisaContractorUmbrella]

It's difficult to comment as I would not like to say anything bad about them, but I got a lot of feedback suggesting is was not the right way to go. The guy did call me and he was very good at explaining things, but I just felt I did not know enough.

I would love to find someone who does use them and after 6 years is still ok but I just did not have the balls to try myself.

Good luck if you do try them!

Thanks

Simeon.

were the words 'offshore' or 'trust' mentioned by any chance?

[sherbert]

It's difficult to comment as I would not like to say anything bad about them, but I got a lot of feedback suggesting is was not the right way to go. The guy did call me and he was very good at explaining things, but I just felt I did not know enough.

I would love to find someone who does use them and after 6 years is still ok but I just did not have the balls to try myself.

Good luck if you do try them!

Thanks

Simeon.