If its to good to be true.
Discussion
Hello,
Looking for a bit of advice, I've been a Ltd. company for close to a year now, doing everything by the book to the best of my knowledge and have an accountant to sort the parts I wouldn't have a clue to do.
A colleague has told me about an accountancy firm he is using, they take 100% of his wages and return 91% with all tax and NI paid this also includes public liability insurance and professional indemnity, and state the end of year tax bill to be under £500.
I'm struggling to find any information on this as I believe that it must be to good to be true.
They claim to have an agreement with HMRC and to have some fairly large corporations on their books.
I always believed that paying 2-3 times as much was the correct way. 9% is very low.
Anyone have any experience or knowledge of this? best asking my accountant for his opinion?
Looking for a bit of advice, I've been a Ltd. company for close to a year now, doing everything by the book to the best of my knowledge and have an accountant to sort the parts I wouldn't have a clue to do.
A colleague has told me about an accountancy firm he is using, they take 100% of his wages and return 91% with all tax and NI paid this also includes public liability insurance and professional indemnity, and state the end of year tax bill to be under £500.
I'm struggling to find any information on this as I believe that it must be to good to be true.
They claim to have an agreement with HMRC and to have some fairly large corporations on their books.
I always believed that paying 2-3 times as much was the correct way. 9% is very low.
Anyone have any experience or knowledge of this? best asking my accountant for his opinion?
Have a read of this
http://forums.contractoruk.com/hmrc-scheme-enquiri...
Have a look at all the other threads in that subforum and consider the amount of people who entered into a similar scheme and are now being chased for many years of back tax plus penalties - the sums are considerable and life changing for many.
I couldn't live like that, worrying that one day HMRC would deem my scheme non-compliant, for the sake of 20% or whatever.
http://forums.contractoruk.com/hmrc-scheme-enquiri...
Have a look at all the other threads in that subforum and consider the amount of people who entered into a similar scheme and are now being chased for many years of back tax plus penalties - the sums are considerable and life changing for many.
I couldn't live like that, worrying that one day HMRC would deem my scheme non-compliant, for the sake of 20% or whatever.
Edited by essayer on Saturday 26th August 07:26
essayer said:
Have a read of this
http://forums.contractoruk.com/hmrc-scheme-enquiri...
Have a look at all the other threads in that subforum and consider the amount of people who entered into a similar scheme and are now being chased for many years of back tax plus penalties - the sums are considerable and life changing for many.
I couldn't live like that, worrying that one day HMRC would deem my scheme non-compliant, for the sake of 20% or whatever.
Just had a quick shufty.http://forums.contractoruk.com/hmrc-scheme-enquiri...
Have a look at all the other threads in that subforum and consider the amount of people who entered into a similar scheme and are now being chased for many years of back tax plus penalties - the sums are considerable and life changing for many.
I couldn't live like that, worrying that one day HMRC would deem my scheme non-compliant, for the sake of 20% or whatever.
Edited by essayer on Saturday 26th August 07:26
It's hard to believe people claim to be so naive.
PurpleMoonlight said:
Just had a quick shufty.
It's hard to believe people claim to be so naive.
Well I was one of them.It's hard to believe people claim to be so naive.
However, when you go into a pucker registered accountant with the intention of setting up as a Ltd Co but get 'advised' that a particular scheme is legal and better with less paperwork needed at my end - you take their advice - they are the experts after all.
Granted, if I had come across some random website offering 91% returns I would be dubious but accountants are, or at least should be considered a professional body that are beyond reproach.
When I was working sites via agys around 00/01 you could have your earnings taxed via the agy, or use an external composite accountancy (which allowed expenses eg tools fares etc) but still stopped Tax or use a company like chainbox that simply paid you something like 97%. They were based somewhere abroad and noone thought for a second what they were doing wasnt dodgy, they were popular with the aussie/kiwi/saffa lot on 2 year work visas as the theory went when the taxman caught up with his backlog they'd be long gone.
Income tax and NI account for 50% of the overall tax take for HMRC, I'd expect them to catch up sooner or later.
Income tax and NI account for 50% of the overall tax take for HMRC, I'd expect them to catch up sooner or later.
There has been a huge crackdown on these in recent years but we were approached by one of these about 9 or 10 years ago. A friend of a friend was an IT contractor used them and paid them about 10% of his gross for them to return all the rest to him. They pitched us and I didn't like the fact that we were liable for the total amount and any penalties if it was found they were not legal. Anyway I decided against it.
Fast forward 7 years and HMRC found out about the scheme and investigated it. They decided it was not legal and the accountants (who now had several hundred clients on the scheme) challenged them it was. It looked set for a long and protracted legal judgement until HMRC - I guess having been advised they were going to lose - offered a settlement. The accountants had to agree to shut it down at the financial year end and the clients had to pay a contribution to the back tax. The IT contractor friend of a friend who had been making about £200k a year had to pay a back payment of £1,000 a year for his 7 years on the scheme!
So I think now the anti-avoidance laws act as a catch all for these but they did work for some. Still glad I didn't do it for the associated stress levels as mentioned above.
Fast forward 7 years and HMRC found out about the scheme and investigated it. They decided it was not legal and the accountants (who now had several hundred clients on the scheme) challenged them it was. It looked set for a long and protracted legal judgement until HMRC - I guess having been advised they were going to lose - offered a settlement. The accountants had to agree to shut it down at the financial year end and the clients had to pay a contribution to the back tax. The IT contractor friend of a friend who had been making about £200k a year had to pay a back payment of £1,000 a year for his 7 years on the scheme!
So I think now the anti-avoidance laws act as a catch all for these but they did work for some. Still glad I didn't do it for the associated stress levels as mentioned above.
It's a bit disappointing people are still trying to get contractors to use this sort of scheme.
I would want to see "their agreement with HMRC" written down and cross reference that against a conversation with HMRC themselves.
1. HMRC have been known to move the goal posts whenever they feel like it
2. These accountancy firms pick up their fees as it's running, but disappear into the ether when HMRC come calling, leaving the contractors with the grief and the bills.
I would want to see "their agreement with HMRC" written down and cross reference that against a conversation with HMRC themselves.
1. HMRC have been known to move the goal posts whenever they feel like it
2. These accountancy firms pick up their fees as it's running, but disappear into the ether when HMRC come calling, leaving the contractors with the grief and the bills.
R11ysf said:
There has been a huge crackdown on these in recent years but we were approached by one of these about 9 or 10 years ago. A friend of a friend was an IT contractor used them and paid them about 10% of his gross for them to return all the rest to him. They pitched us and I didn't like the fact that we were liable for the total amount and any penalties if it was found they were not legal. Anyway I decided against it.
Fast forward 7 years and HMRC found out about the scheme and investigated it. They decided it was not legal and the accountants (who now had several hundred clients on the scheme) challenged them it was. It looked set for a long and protracted legal judgement until HMRC - I guess having been advised they were going to lose - offered a settlement. The accountants had to agree to shut it down at the financial year end and the clients had to pay a contribution to the back tax. The IT contractor friend of a friend who had been making about £200k a year had to pay a back payment of £1,000 a year for his 7 years on the scheme!
Do you have any more details on the scheme? I, for all the wrong reasons, am pretty clued up on many of the different schemes and the status of the various investigations, and I have never heard of HMRC offering such a generous settlement. I know of a large number of people who would be very interested to hear of this.Fast forward 7 years and HMRC found out about the scheme and investigated it. They decided it was not legal and the accountants (who now had several hundred clients on the scheme) challenged them it was. It looked set for a long and protracted legal judgement until HMRC - I guess having been advised they were going to lose - offered a settlement. The accountants had to agree to shut it down at the financial year end and the clients had to pay a contribution to the back tax. The IT contractor friend of a friend who had been making about £200k a year had to pay a back payment of £1,000 a year for his 7 years on the scheme!
Gassing Station | Finance | Top of Page | What's New | My Stuff