Reply to: Offshore umbrella schemes

[geoff from contracta IOM]

That was an offshore solution for the German market. It ran on very similar lines to a UK offshore scheme, except the German authorities decided it was tax evasion.

I have also been approached by management co's about whether I would like to use an offshore solution, totally legal of course.

Of course this sort of thing isn't restricted to the German market is it?

Sorry BB it was not an "offshore solution" it was tax evasion pure and simple, since when has it been ok to send part of your income to an offshore account and not tell tax authorities ? These people were either extremely naive or thought they would not get caught and took the chance.

[craig1]

Did this argument not get booted around about a month ago. The upshot being Geoff insisting the offshore schemes were totally cool, man, while almost everybody else reached for the bargepoles?

Yep, I think the conclusion from the contractors who posted was that if these schemes go under taking contractors with them then the scheme providers will simply shrug their shoulders and move onto their next identified loophole.

[geoff from contracta IOM]

Did this argument not get booted around about a month ago. The upshot being Geoff insisting the offshore schemes were totally cool, man, while almost everybody else reached for the bargepoles?

Quote - Just to help with my research, and to put your enthusiasm in context, can you advise us here Geoff what your personal exposure is if your scheme is delcared illegal, as opposed to your clients? Would that help explain your insistance that they are safe? I'm sure it's safe for you!

I don't try and pretend to anyone they are totally safe and I have said that until i'm blue in the face, what I have said is look at all the information available, talk to experts and make an informed decision. Don't listen to someone who knows F all about it and has never bothered to learn either.

[BlasterBates]

That seems to be a thread about the perils of contracting in Germany. I've only skimmed through a few pages but it seems to consist mainly of people who have been chased up by the German tax authorities once they've returned home to the UK. Is there anything in there that deals with people using offshore solutions?

On the more general point, yes people have had problems of course, eg BN66 and Tract (although the latter seems like a case of a company going bust and keeping the cash, which can and does happen to an umbrella firm or agency of course) and the former is a very specific case looking at a particular point of law. In effectively shutting down EBTs in December, HMRC have as good as given their grudging agreement to the fact they were perfectly legal up to that point. Their is also lots of case law (mostly initiated by HMRC themselves) that would make it incredibly difficult for them to retrospectively attack EBTs, which is why nobody who has interest in the subject thinks that they will.

People who run umbrella and limited company solutions, and contractor websites often have a vested interest in painting offshore solutions as "dodgy" and trot out the BN66 line, but they're very different circumstances.

That was an offshore solution for the German market. It ran on very similar lines to a UK offshore scheme, except the German authorities decided it was tax evasion.

I have also been approached by management co's about whether I would like to use an offshore solution, totally legal of course.

Of course this sort of thing isn't restricted to the German market is it?

[Alan @ BroomeAffinity]

Did this argument not get booted around about a month ago. The upshot being Geoff insisting the offshore schemes were totally cool, man, while almost everybody else reached for the bargepoles?

[Vallah]

Try this...and believe me it's the tip of the iceberg, I know people who were in this scheme, offshore companies with tax planers and all legally above aboard:

http://forums.contractoruk.com/accou...an-cometh.html

...very difficult to take legal action because they're based offshore, and if you've been fleeced for a couple of hundred grand, you don't really have any money left.

That seems to be a thread about the perils of contracting in Germany. I've only skimmed through a few pages but it seems to consist mainly of people who have been chased up by the German tax authorities once they've returned home to the UK. Is there anything in there that deals with people using offshore solutions?

On the more general point, yes people have had problems of course, eg BN66 and Tract (although the latter seems like a case of a company going bust and keeping the cash, which can and does happen to an umbrella firm or agency of course) and the former is a very specific case looking at a particular point of law. In effectively shutting down EBTs in December, HMRC have as good as given their grudging agreement to the fact they were perfectly legal up to that point. Their is also lots of case law (mostly initiated by HMRC themselves) that would make it incredibly difficult for them to retrospectively attack EBTs, which is why nobody who has interest in the subject thinks that they will.

People who run umbrella and limited company solutions, and contractor websites often have a vested interest in painting offshore solutions as "dodgy" and trot out the BN66 line, but they're very different circumstances.

[v8gaz]

I wasn't trying to troll

Just that whilst there are many varied opinions on the subject of tax mitigation from the moral stance we all have to conceed that in terms of the current schemes in existence everything said on the subject is an opinion. My position is that I am favouring the opinion of QC's , big 4 tax accountants and chartered tax advisers rather than the opinion of those less informed on the subject. That does not mean that the discussion is not worth having though and your point about if you don't do the research don't use it is very valid !

Just to help with my research, and to put your enthusiasm in context, can you advise us here Geoff what your personal exposure is if your scheme is delcared illegal, as opposed to your clients? Would that help explain your insistance that they are safe? I'm sure it's safe for you!

[geoff from contracta IOM]

Try this...and believe me it's the tip of the iceberg, I know people who were in this scheme, offshore companies with tax planers and all legally above aboard:

http://forums.contractoruk.com/accou...an-cometh.html

...very difficult to take legal action because they're based offshore, and if you've been fleeced for a couple of hundred grand, you don't really have any money left.

SPLIT INCOME eekeekeekeek ??????????? Are you honestly trying to suggest to me that people thought this was legitimate tax planning ? I'm can genuinely say I am not in the least bit surprised they got F**ked over for this I would be more surprised if they hadn't. Tax planners you mean like Robert Maxwell type tax planning ? This type of tax planning is described by a word beginning with F.

[BlasterBates]

Try this...and believe me it's the tip of the iceberg, I know people who were in this scheme, offshore companies with tax planers and all legally above aboard:

http://forums.contractoruk.com/accou...an-cometh.html

...very difficult to take legal action because they're based offshore, and if you've been fleeced for a couple of hundred grand, you don't really have any money left.

[geoff from contracta IOM]

You can't dispute that thousands of contractors have had their fingers badly burnt because it's true.

I've also noticed now how offshore tax planers like yourself are suggesting that high court judges don't understand the law (BN66). Tax planers have concoted their own view of UK law and claim they know it better than, HMRC, the government and high court judges.

I also know of contractors who took the advice of tax planners în Europe and ended up in jail. Their scheme was of course legally water tight and it was the judges who got it wrong.

I will address these points one at a time -

No one is suggesting judges don't understand the law, BN66 is a very unique case that deals with two elements, retrospection and more critically "intention" of legislation which is a new concept in our legal system. Tax planners and QC's ect. have not concocted anything they interpret the law as they see it.

If these contractors took advice from a bona fide professional they can look forward to a hefty compensation payout from the professionals PI insurance. If it was some bloke in a pub not sure you can call them Tax planners any more than you can call Maddoff a fund manager. Can you be specific about the case you are referring to ?

[BlasterBates]

Very helpful of you to emphasise my point about the uninformed and factually devoid offering opinion ! Thanks

You can't dispute that thousands of contractors have had their fingers badly burnt because it's true.

I've also noticed now how offshore tax planers like yourself are suggesting that high court judges don't understand the law (BN66). Tax planers have concoted their own view of UK law and claim they know it better than, HMRC, the government and high court judges.

I also know of contractors who took the advice of tax planners în Europe and ended up in jail. Their scheme was of course legally water tight and it was the judges who got it wrong.

[geoff from contracta IOM]

Do not understimate the number of people who have been burned by offshore tax planers, it's not an exceptional unlucky few. There are a huge number, and the oney that get burnt get very badly burned indeed.

DON'T TOUCH

Very helpful of you to emphasise my point about the uninformed and factually devoid offering opinion ! Thanks

[geoff from contracta IOM]

What is this "Wrong"...?

My stance has always been that (a) they are higher risk then conventional arrangements or they wouldn't be paing higher returns, (b) the returns are rarely sufficient to warrant that extra risk and (c) they are mostly sold on highly incomplete information so novice contractors and any that don't have a fairly good understanding of the wider tax landscape should keep away or get burned.

I happen to beleive that if you live, work and are paid in the UK you should be paying UK taxes, While that is not germane to the risk argument, it is why I don't support people taking the EBT route and I seriously disapprove of all the secrecy surrounding the schemes, even though I understand why you guys think it necessary. If the schemes are safe, tell people how they work up front.

And if you go back over the years, I have never deviated from that approach towrads EBTs. BN66 and Tract are different.

Finally, I only said existing users may be OK for now. Don't turn that into any kind of support for you selling new schemes, which I think is risky in the extreme. The current nonsense of "I'm self employed" won't last since it is patently ridiculous. EBTs are for long term corporates, not .Net coders.

HTH

I wasn't trying to troll

Just that whilst there are many varied opinions on the subject of tax mitigation from the moral stance we all have to conceed that in terms of the current schemes in existence everything said on the subject is an opinion. My position is that I am favouring the opinion of QC's , big 4 tax accountants and chartered tax advisers rather than the opinion of those less informed on the subject. That does not mean that the discussion is not worth having though and your point about if you don't do the research don't use it is very valid !

[BlasterBates]

Do not understimate the number of people who have been burned by offshore tax planers, it's not an exceptional unlucky few. There are a huge number, and the oney that get burnt get very badly burned indeed.

DON'T TOUCH

[malvolio]

Mal is that an admission that you and many many others freely dispensed advice that was completely wrong about EBT's ?

What is this "Wrong"...?

My stance has always been that (a) they are higher risk then conventional arrangements or they wouldn't be paing higher returns, (b) the returns are rarely sufficient to warrant that extra risk and (c) they are mostly sold on highly incomplete information so novice contractors and any that don't have a fairly good understanding of the wider tax landscape should keep away or get burned.

I happen to beleive that if you live, work and are paid in the UK you should be paying UK taxes, While that is not germane to the risk argument, it is why I don't support people taking the EBT route and I seriously disapprove of all the secrecy surrounding the schemes, even though I understand why you guys think it necessary. If the schemes are safe, tell people how they work up front.

And if you go back over the years, I have never deviated from that approach towrads EBTs. BN66 and Tract are different.

Finally, I only said existing users may be OK for now. Don't turn that into any kind of support for you selling new schemes, which I think is risky in the extreme. The current nonsense of "I'm self employed" won't last since it is patently ridiculous. EBTs are for long term corporates, not .Net coders.

HTH