Offshore Umbrella Co

[LisaContractorUmbrella]

Lisa I apreciate you are not an accountant but waving flags really doesn't have anything to do with tax legislation, HMRC would like you to believe in fairness , their intention , overly agressive and the tooth fairy.
Yes it's best not to attract attention if for no other reason than it takes time and effort to deal with enquiries and the reason why people should " get away " with it is because it's legal and thats why people "get away " with many things in life because we have for a few years now relied on legislation to define what is right and what is wrong, the reason being everybody has a different interpretation and this is not " fair " as it provides no clarity for people. I agree that a QC's opinion means nothing to HMRC but in this instance just about every tax QC in the UK has the same opinion so HMRC have to find one that agrees with them in order to justify pursuing a case. ( or just change the law to close the loophole as this is cheaper and quicker )

You still haven't addressed the point about the loan itself though Geoff but then again you never do so I don't see why today should be any different

Look, this all comes down to 'opinion' as we all know - I just think that, as I have always said, people should know all the risks before making a decision.

[malvolio]

Look, this all comes down to 'opinion' as we all know - I just think that, as I have always said, people should know all the risks before making a decision.

I think we are all agreed on that. The problem is making the point loudly enough that someone who only sees the pound signs is prompted to take notice.

What would be interesting to know is if the rate of take-up of such schemes by one man bands has changed over the last year or so...

[LisaContractorUmbrella]

I think we are all agreed on that. The problem is making the point loudly enough that someone who only sees the pound signs is prompted to take notice.

What would be interesting to know is if the rate of take-up of such schemes by one man bands has changed over the last year or so...

Well there seem to be more schemes, making more and more outrageous promises, but whether that's an indication of a bigger take up or just the fact that they haven't needed to advertise up until now I wouldn't like to say

[geoff from contracta IOM]

You still haven't addressed the point about the loan itself though Geoff but then again you never do so I don't see why today should be any different

Look, this all comes down to 'opinion' as we all know - I just think that, as I have always said, people should know all the risks before making a decision.

What point about the loan ? You accuse me of being evasive on this issue what exactly would you like to know ? the problem is you don't have specific circumstances so I cannot give you broad sweeping advice. The loan is not in any way connected with the contractors employment the contractor is not employed by anyone ( see DR legislation 9 th dec 2010 ) it is a loan pure and simple it meets all the legal definitions of a loan what more is there to add ?

[Harmer]

Without wanting to get knives thrown at me...I think the biggest problem comes is that a lot of individuals are unaware of how disastrous the outcome could be if the offshore scheme doesn't work. A self-employed individual entering into arrangements to place income out of the UK in order to bring it back into the UK in a more tax efficient way is open to HMRC challenge (not saying outright HMRC would be successful) and it is the individual who face the wrath of HMRC and trying to argue their case. This kind of argument against HMRC is a far cry from IR35 and Self-employed status, the legal arguments are far more complex.

In addition I have yet to find an offshore scheme provider who explains in laymans terms exactly what they do and what the risks (if any) are, fair enough without specific details you can't give specific take home information but any umbrella company/agency/Limited company provider/commercial contracting company can explain broadly the principles, the HMRC risks, the processes etc.

[david at QIS]

I think the question here might be :

The loan will never by repaid so when is the loan written off by the trust and what are the tax liabilities when it is?

[geoff from contracta IOM]

Without wanting to get knives thrown at me...I think the biggest problem comes is that a lot of individuals are unaware of how disastrous the outcome could be if the offshore scheme doesn't work. A self-employed individual entering into arrangements to place income out of the UK in order to bring it back into the UK in a more tax efficient way is open to HMRC challenge (not saying outright HMRC would be successful) and it is the individual who face the wrath of HMRC and trying to argue their case. This kind of argument against HMRC is a far cry from IR35 and Self-employed status, the legal arguments are far more complex.

In addition I have yet to find an offshore scheme provider who explains in laymans terms exactly what they do and what the risks (if any) are, fair enough without specific details you can't give specific take home information but any umbrella company/agency/Limited company provider/commercial contracting company can explain broadly the principles, the HMRC risks, the processes etc.

If you want to give me a call I will happily talk you through it it is a comoon allegation that scheme providers don't explain the risks, I can only speak for myself but I explain it in terms of risk v reward. I clearly explain the risks and outline where and how they may arise and the potential penalties then I explain the reward and let people decide for themselves. I have no doubt that there are other providers out there who gloss over or dismiss the risks and focus solely on the benefits.

[Vallah]

There are Geoff. Like you we fully explain the potential risks, such as they are, and let people make their own minds up. Most of our new business comes from recommendations from accountants and tax advisors in any case, who carefully explain every last detail of our scheme and how it works. If people sign up after that, I am confident that they doing it with their eyes wide open, and it is why we have never had any problems in the last 7 years of helping contractors.

[david at QIS]

There has to be tax paid on the "LOAN AMOUNT" when it changes to income - when is that due? When the contractor leaves the scheme? when he dies? when the trust shuts down?

[david at QIS]

The silence is deafening on this one as well !!!