Up to 90%

[TykeMerc]

Yes, I think that personal liability would make them pull their horns in, nothing else will - there are no sanctions to stop them from dropping one scheme and starting up another.

And as the OP shows, there's one born every minute to take up the slack.

True, however since the scheme providers aren't playing fast and loose with the tax rules themselves, but their mug punters are it's not likely to be the scheme providers that get attacked. Unless of course there's a provider actively engaged in using a criminal approach, fraud or they have some corporate liability.

To be honest HMRC probably don't care that much about the scheme providers themselves.
The targets are the mugs (sorry clients) using these "tax planning" schemes as there's Income Tax and NI being avoided and the mugs are unlikely to have expensive legal protection and/or be sat safely in some offshore tax haven.

[DonkeyRhubarb]

To be honest HMRC probably don't care that much about the scheme providers themselves.

I think you're right but they ought to in the same way the Police care about drug dealers. Without the providers (dealers) there are no users.

[TykeMerc]

I think you're right but they ought to in the same way the Police care about drug dealers. Without the providers (dealers) there are no users.

I agree whole heartedly, but where your drug dealer example falls down is that the Police have a criminal offence to pursue, the supply chain there is clearly breaking the law, the end users are small fry in their terms and can more or less be ignored.

When it comes to these scheme providers they're operating completely legally. Plus, in many cases, they have their bases abroad so can't be touched by the UK authorities anyway and it's only their corporate profits (if any are allowed to exist in the UK) that HMRC care about for taxation.

In reality the scheme providers are truly laughing, they take no risk, cream a very nice fee and are laughing all the way to the bank, unless it becomes a criminal offence to exploit the greed of punters who willingly sign up to these schemes then the targets will always be the users and not the providers.

[LisaContractorUmbrella]

True, however since the scheme providers aren't playing fast and loose with the tax rules themselves, but their mug punters are it's not likely to be the scheme providers that get attacked. Unless of course there's a provider actively engaged in using a criminal approach, fraud or they have some corporate liability.

To be honest HMRC probably don't care that much about the scheme providers themselves.
The targets are the mugs (sorry clients) using these "tax planning" schemes as there's Income Tax and NI being avoided and the mugs are unlikely to have expensive legal protection and/or be sat safely in some offshore tax haven.

I think the ones promising 80%+ take home through a contractor benefit trust or some such are probably playing a bit fast and a tad loose

[LisaContractorUmbrella]

Came across this one this morning - another new 'scheme' from the people who brought you Dynamic Partners:

Up to 90%
Same day payments
Employed status
No set-up or exit fees
Free Public Liability Insurance
Free Professional Indemnity Insurance
Personal Account Manager
Generous refer a friend scheme
Weekly or monthly payments
We handle all of your paperwork from contract negotiation through to payment process
You send us your timesheet and we take care of the rest for you
Assistance with tax returns

And look who's putting in another appearance:

We offer our clients reassurance around the robustness of our strategy as it has been developed with top Tax QC Robert Venables. ** is a UK based business so you are not employed by a business in an offshore tax haven and all your money will be kept in the UK.

[TykeMerc]

I think the ones promising 80%+ take home through a contractor benefit trust or some such are probably playing a bit fast and a tad loose

No doubt, but it's their users that enter the firing line because of the rule bending, the worst that's ever likely to happen to the providers is the closure of the schemes which is no real skin off their nose.

That new scheme you mentioned will no doubt attract plenty of people and make the providers a pretty penny, until the business model fails that will continue indefinitely.

[TestMangler]

Or at least on their very last legs.

There can't be many contractors now who aren't aware that schemes are a recipe for disaster.

For a scheme to be economically viable, you need a fair few mugs to sign up just to cover legal/admin costs.

I just can't see the numbers being out there for anyone to make any money out of them.

DR, on a gig I started a couple of years ago, I was really bloody surprised to find that, in a team of 12 test analysts I had, 6, yes SIX, were (and still are) using a scheme (Bedouin). One of them, I would consider a mate and have been trying to talk him off it, the other five I couldn't really care less about.

The agency (Hydrogen) was actively promoting the scheme and these guys were all generally Umbrella users who were talked into using the agency's 'payment partner' at the point of contract signing.

I would reckon that using this route, there are still plenty of mugs out there who will go for it, especially newer contractors.

Just because we all know how contracting works doesn't mean everyone does and there appears to be an unlimited supply of newbies who are easily talked into schemes by agents telling them that 'this is how it works'.

[jbryce]

DR, on a gig I started a couple of years ago, I was really bloody surprised to find that, in a team of 12 test analysts I had, 6, yes SIX, were (and still are) using a scheme (Bedouin). One of them, I would consider a mate and have been trying to talk him off it, the other five I couldn't really care less about.

The agency (Hydrogen) was actively promoting the scheme and these guys were all generally Umbrella users who were talked into using the agency's 'payment partner' at the point of contract signing.

I would reckon that using this route, there are still plenty of mugs out there who will go for it, especially newer contractors.

Just because we all know how contracting works doesn't mean everyone does and there appears to be an unlimited supply of newbies who are easily talked into schemes by agents telling them that 'this is how it works'.

It is terrifying - the schemes use the term umbrella and basically ride the backs of compliant and legal operations. "We're just a normal umbrella - but with better returns!

In fairness, some schemes do back their claims up and appear to be ready to pursue through the courts, but others change their names subtly and abandon their users to their fate.

[TestMangler]

It is terrifying - the schemes use the term umbrella and basically ride the backs of compliant and legal operations. "We're just a normal umbrella - but with better returns!

In fairness, some schemes do back their claims up and appear to be ready to pursue through the courts, but others change their names subtly and abandon their users to their fate.

Agreed. In a couple of cases I know of, the contractors didn't really have a clue what they were signing up to. As far as they know, they are doing what the agency told them was 'they way they worked'. There are obviously a small percentage of people who would say "Hell mend them if they didn't do their research first" but newbies are more likely to turn to agents for advice. It usually takes until your second or third contract to realise what kind of beast an agent actually is

[PerfectStorm]

1) Go for the 75% route via limited company
2) Sleep well at night
3) ????
4) PROFIT