I.T contractors and a t trust.
Discussion
Give this a read before buying into any scheme:
https://www.gov.uk/government/publications/spotlig...
https://www.gov.uk/government/publications/spotlig...
Be aware:
Context: I used similar schemes for a few years starting in 2002. I have been under investigation since 2004, with no end yet in sight, and over the last 10 years I have become much, much more familiar with the way that HMRC and the tax courts work than I would ever have wanted to.
- There is no such thing as 'registered' or 'approved'. HMRC does not register or approve tax avoidance schemes.
- There is no such thing as 'compliant' that doesn't result in you paying full PAYE and NI on your contract income. Even a standard low salary/dividend arrangement highly likely to legislated against in the coming months.
- HMRC is 100% laser-focussed on anything which is deemed to create a tax advantage and IT contractors are Public Enemy No.1. For recent examples, check out any budget in the last 7 years or so...HMRC are massively targetted on reducing avoidance and they are very serious about doing so.
Context: I used similar schemes for a few years starting in 2002. I have been under investigation since 2004, with no end yet in sight, and over the last 10 years I have become much, much more familiar with the way that HMRC and the tax courts work than I would ever have wanted to.
Who said it was compliant? The company offering the services, no doubt...?
www.ContractorUK.com and join the forum. Ask around.
www.ContractorUK.com and join the forum. Ask around.
They tell you it's not an EBT, accept it is, just by another name. Most of theese "trusts" work on the same loan system, essentially they pay you via a loan that you never have to pay back, does that sound right\legal to you?
All the assurances in the world from the product seller mean nought if\when you get investigated by HMRC and I have seen this happen to a lot of people who ran similar schemes. As others have stated, HMRC have a real hard-on about this stuff now so ask yourself is it really worth the hassle just to try to save yourself a few percentage points of tax?
If getting a 6 figure tax demand through the post sounds like fun, go for it.
I'd worry more about developing your skills, making contacts, you know spending time growing your business rather than trying to save a few hundred quid off your tax bill but that's just me.
All the assurances in the world from the product seller mean nought if\when you get investigated by HMRC and I have seen this happen to a lot of people who ran similar schemes. As others have stated, HMRC have a real hard-on about this stuff now so ask yourself is it really worth the hassle just to try to save yourself a few percentage points of tax?
If getting a 6 figure tax demand through the post sounds like fun, go for it.
I'd worry more about developing your skills, making contacts, you know spending time growing your business rather than trying to save a few hundred quid off your tax bill but that's just me.
Likewise, dont do it.
I am going through a world of pain with one now.
Luckily, I was only in the scheme(s) a couple of years before heard wind in 2010 of upcoming legislation that would tighten things up, the legislation been due in April 2011. On the day I heard this, I started the process of to become LTD Co. Two days later all monies earned were through that, although still had a few thousand to come from the trust.
The release that HMRC gave in December 2010 did imply that they would be retrospectively applying the legislation to the time that they announced the change but transpires that they have retrospectively applied it much earlier than that.
Two things really annoy me -
1, they are retrospectively applying legislation. Imagine receiving a speeding fine because you drove down a road at 40mph but they changed the speed limit to 30 a week after?
2, David Cameron said publicly that Jimmy Carr who was on a similar scheme to myself hadn't acted illegally, just immorally. If thats the case, I have no case to answer surely?
Nothing will change though and I will be forced to pay the £8k I apparently owe. Thats ok, as its likely to bankrupt me, possibly force me out the house and put a family of four into social housing. That will cost the Government more than the £8k I owe them though - so kinda counter productive.
I am going through a world of pain with one now.
Luckily, I was only in the scheme(s) a couple of years before heard wind in 2010 of upcoming legislation that would tighten things up, the legislation been due in April 2011. On the day I heard this, I started the process of to become LTD Co. Two days later all monies earned were through that, although still had a few thousand to come from the trust.
The release that HMRC gave in December 2010 did imply that they would be retrospectively applying the legislation to the time that they announced the change but transpires that they have retrospectively applied it much earlier than that.
Two things really annoy me -
1, they are retrospectively applying legislation. Imagine receiving a speeding fine because you drove down a road at 40mph but they changed the speed limit to 30 a week after?
2, David Cameron said publicly that Jimmy Carr who was on a similar scheme to myself hadn't acted illegally, just immorally. If thats the case, I have no case to answer surely?
Nothing will change though and I will be forced to pay the £8k I apparently owe. Thats ok, as its likely to bankrupt me, possibly force me out the house and put a family of four into social housing. That will cost the Government more than the £8k I owe them though - so kinda counter productive.
Tomo1971 said:
Likewise, dont do it.
I am going through a world of pain with one now.
Luckily, I was only in the scheme(s) a couple of years before heard wind in 2010 of upcoming legislation that would tighten things up, the legislation been due in April 2011. On the day I heard this, I started the process of to become LTD Co. Two days later all monies earned were through that, although still had a few thousand to come from the trust.
The release that HMRC gave in December 2010 did imply that they would be retrospectively applying the legislation to the time that they announced the change but transpires that they have retrospectively applied it much earlier than that.
Two things really annoy me -
1, they are retrospectively applying legislation. Imagine receiving a speeding fine because you drove down a road at 40mph but they changed the speed limit to 30 a week after?
2, David Cameron said publicly that Jimmy Carr who was on a similar scheme to myself hadn't acted illegally, just immorally. If thats the case, I have no case to answer surely?
Nothing will change though and I will be forced to pay the £8k I apparently owe. Thats ok, as its likely to bankrupt me, possibly force me out the house and put a family of four into social housing. That will cost the Government more than the £8k I owe them though - so kinda counter productive.
1. You've had 5 years of knowing (well, strongly suspecting) you'd have a bill coming your way.I am going through a world of pain with one now.
Luckily, I was only in the scheme(s) a couple of years before heard wind in 2010 of upcoming legislation that would tighten things up, the legislation been due in April 2011. On the day I heard this, I started the process of to become LTD Co. Two days later all monies earned were through that, although still had a few thousand to come from the trust.
The release that HMRC gave in December 2010 did imply that they would be retrospectively applying the legislation to the time that they announced the change but transpires that they have retrospectively applied it much earlier than that.
Two things really annoy me -
1, they are retrospectively applying legislation. Imagine receiving a speeding fine because you drove down a road at 40mph but they changed the speed limit to 30 a week after?
2, David Cameron said publicly that Jimmy Carr who was on a similar scheme to myself hadn't acted illegally, just immorally. If thats the case, I have no case to answer surely?
Nothing will change though and I will be forced to pay the £8k I apparently owe. Thats ok, as its likely to bankrupt me, possibly force me out the house and put a family of four into social housing. That will cost the Government more than the £8k I owe them though - so kinda counter productive.
2. Jimmy Carr didn't get away with it either.
Tomo1971 said:
Nothing will change though and I will be forced to pay the £8k I apparently owe. Thats ok, as its likely to bankrupt me, possibly force me out the house and put a family of four into social housing. That will cost the Government more than the £8k I owe them though - so kinda counter productive.
Oh come on - talk about laying it on thick.You have been enjoying very tax efficient earnings for many years - and now somehow 8k is going to bankrupt you?
You knew this was coming you should of put some money aside.
I know someone caught up in the IoM scheme above, sure they are moaning about it - but they know they have to pay it. I remember years ago when they were boasting about the 'scheme' - not quite so smug now.
bigandclever said:
1. You've had 5 years of knowing (well, strongly suspecting) you'd have a bill coming your way.
Hardly. If the HMRC announce they are planning legislation to make something illegal, it's perfectly reasonable to conclude it must currently be legal. The issue in this case is that they make retrospective rules.Dr Jekyll said:
bigandclever said:
1. You've had 5 years of knowing (well, strongly suspecting) you'd have a bill coming your way.
Hardly. If the HMRC announce they are planning legislation to make something illegal, it's perfectly reasonable to conclude it must currently be legal. The issue in this case is that they make retrospective rules.Retrospective legislation, for tax or otherwise, is s
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