Montpelier Tax Consultants
Discussion
Just wondered if any contractors here use Montpelier Tax Consultants who have some kind of scheme going using an Offshore trust, I think. I know a few contractors that have used this over the past few years and end up taking home something like 80-90% of their contract (Montpelier take around 10%. According to someone who uses them they claim they are not effected by the latest MSC legistlation as they are not an MSC. Can anyone confirm whether the Inland Revenue have ever inspected this outfit and whether the loophole is still valid?
Cheers, James.
Cheers, James.
I know of Montpelier / MTM and their ilk, but have always avoided them.
More info over on www.contractoruk.com.
Typically they employ discretionary trusts or employee benefit trusts to supposedly avoid tax due.
Whilst some of the more extreme loan schemes are (I believe) within the law, there are some major potential pitfalls - such as the holding company going into administration, cue the loan having to be repaid by the loanee.
Of course, that won't happen. Until HMRC stiff the holding company with a massive bill that is.
An efficiently run business can take home around 5-10% less after tax. Without any dodgy schemes.
Of course, the scarier thing is that by it's very nature, putting your earnings into a discretionary trust means you have no control over them, and may never see them again.
More info over on www.contractoruk.com.
Typically they employ discretionary trusts or employee benefit trusts to supposedly avoid tax due.
Whilst some of the more extreme loan schemes are (I believe) within the law, there are some major potential pitfalls - such as the holding company going into administration, cue the loan having to be repaid by the loanee.
Of course, that won't happen. Until HMRC stiff the holding company with a massive bill that is.
An efficiently run business can take home around 5-10% less after tax. Without any dodgy schemes.
Of course, the scarier thing is that by it's very nature, putting your earnings into a discretionary trust means you have no control over them, and may never see them again.
Edited by UpTheIron on Thursday 15th March 21:00
MTM will cease to trade as of the 7th April due to the changes in the MSC (Managed Services Company) legislation brought about by Mr Brown
Agencies will have liability too now, so basically from next year if you're not either running a
(PSC) Personal Service Companies (ie individual Ltd Companies)
Umbrella Companies (groups of contractors paying standard PAYE etc)
The agency will not touch you as THEY will be liable.
Basically the Government want more money from contractors. Luckily, I'm moving to the States so fuck you Gordon Brown
kingstonking said:
"MTM will cease to trade as of the 7th April due"
Is that the offical word from MTM / Mont?
Or your own view of the MSC legislation impact? Just wondering as I was going to use them.
Is that the offical word from MTM / Mont?
Or your own view of the MSC legislation impact? Just wondering as I was going to use them.
Yes that's official. I'm a current client
Edited by Jonny5 on Monday 26th March 23:40
kingstonking said:
Umm don't see how HMRC could force the offshore company to pay PAYE and NIC's etc if the company is resident in the Isle of Man as it is completely outside of the UK tax jurisdiction. Have no 'alternatives' been mentioned I wonder.
They are imposing full tax liability on the agents if their contractors don't comply to either Ltd company or Umbrella style PAYE scheme.
Eric Mc said:
Forget about the base country of the company.
The Revenue want to tax the individual - and that will be based on where he/she is resident for tax purposes, not the employing entity.
Eric, MTM are not an MSC in the typical sense. As I unserstand it, they and others utilise the same loopholes - you become a PAYE employee, and the use offshore discretionary trusts to make loans to their own staff on top of a (low) salary. The Revenue want to tax the individual - and that will be based on where he/she is resident for tax purposes, not the employing entity.
The "tax avoidance" element is the trust/loan setup that does not attract income tax.
My issue with these organisations is broadly along these lines:
- HMRC investigate MTM / their UK Ltd.
- Find that MTM are guilty of 'something' that incurs a large fine/penalty/back-dated tax/NI due.
- MTM's UK Ltd is forced into administration.
- Administrators come in and to maximise return to creditor (HMRC), call in the loan.
www.tekpay.com are another - some details are on their website.
Edited by UpTheIron on Tuesday 27th March 08:59
Umm interesting. Actually MTM don't employee you. You are a self-employed consultant working for their IoM consultancy and placed 'onsite' in the UK. They also don't utilise a loan structure but do use trusts. All income is declared opennly to the HMRC as yes you are a UK resident for taxation purposes. The benefit comes from how the income has been earned in the IoM. Unless the 'loan' option is their new/latest structure. Payscheme+ seems the same as Tekpay. The 'loan' structure seems the latest and only other option that is being promoted now due to the MSC legislation as you are an 'employee'. All quite interesting. Pro's and con's with it all really.
Edited by kingstonking on Tuesday 27th March 09:45
there is no loan structure. Can't say anymore as anyone on the scheme will have signed non-disclosure agreements and at personal risk. End of topic.
kingstonking said:
Umm interesting. Actually MTM don't employee you. You are a self-employed consultant working for their IoM consultancy and placed 'onsite' in the UK. They also don't utilise a loan structure but do use trusts. All income is declared opennly to the HMRC as yes you are a UK resident for taxation purposes. The benefit comes from how the income has been earned in the IoM. Unless the 'loan' option is their new/latest structure. Payscheme+ seems the same as Tekpay. The 'loan' structure seems the latest and only other option that is being promoted now due to the MSC legislation as you are an 'employee'. All quite interesting. Pro's and con's with it all really.
Edited by kingstonking on Tuesday 27th March 09:45
Gassing Station | Business | Top of Page | What's New | My Stuff