working offshore and bringing cash back?
Discussion
Sorry, so far off topic....
A friend has been offered the chance to do a month or so of consultancy in the MiddleEast.
Rates would be good, tax would be zero. Might earn £30k or so.
Some of this friend's overseas colleagues have suggested he gets the money paid into an offshore acccount out in the Gulf, and just spend it over time using a credit card.
Any cash spent outside the EU would be fine (e.g. holidays and the like) as it would have been earnt offshore and spent offshore.
To use the credit card in the UK would obviously bring the cash onshore without paying tax, and we could clearly never condone that, but how likely would it be to succeed?
Can the revenue check up on credit card spending?
A friend has been offered the chance to do a month or so of consultancy in the MiddleEast.
Rates would be good, tax would be zero. Might earn £30k or so.
Some of this friend's overseas colleagues have suggested he gets the money paid into an offshore acccount out in the Gulf, and just spend it over time using a credit card.
Any cash spent outside the EU would be fine (e.g. holidays and the like) as it would have been earnt offshore and spent offshore.
To use the credit card in the UK would obviously bring the cash onshore without paying tax, and we could clearly never condone that, but how likely would it be to succeed?
Can the revenue check up on credit card spending?
NDT said:
Sorry, so far off topic....
A friend has been offered the chance to do a month or so of consultancy in the MiddleEast.
Rates would be good, tax would be zero. Might earn £30k or so.
Some of this friend's overseas colleagues have suggested he gets the money paid into an offshore acccount out in the Gulf, and just spend it over time using a credit card.
Any cash spent outside the EU would be fine (e.g. holidays and the like) as it would have been earnt offshore and spent offshore.
To use the credit card in the UK would obviously bring the cash onshore without paying tax, and we could clearly never condone that, but how likely would it be to succeed?
Can the revenue check up on credit card spending?
If your friend is assessed for tax in the UK they will get taxed on it here, especially if working offshore for such a short period. I worked in Dubai for a while and had to spend quite a while there before I was considered a non-resident for tax purposes. Have a look on the Customs and Revenue website. Unfortunately the fact it is earn offshore and spent offshore is not material. I also used to literlly work offshore, was paid offshore, kept money offshore, but was still assessed for tax in the UK on it.A friend has been offered the chance to do a month or so of consultancy in the MiddleEast.
Rates would be good, tax would be zero. Might earn £30k or so.
Some of this friend's overseas colleagues have suggested he gets the money paid into an offshore acccount out in the Gulf, and just spend it over time using a credit card.
Any cash spent outside the EU would be fine (e.g. holidays and the like) as it would have been earnt offshore and spent offshore.
To use the credit card in the UK would obviously bring the cash onshore without paying tax, and we could clearly never condone that, but how likely would it be to succeed?
Can the revenue check up on credit card spending?
Thanks Eric and Popeyed.
Understand the official view of the earnings, but I'm more interested in the practical side of whether this method would actually work?
Would the revenue ever be able to get wind of the credit card transactions, assuming that they didn't ever have cause to do a full investigation?
Understand the official view of the earnings, but I'm more interested in the practical side of whether this method would actually work?
Would the revenue ever be able to get wind of the credit card transactions, assuming that they didn't ever have cause to do a full investigation?
Strawman said:
Isn't there new legislation dealing with car sales, so if someone pays over a certain amount in cash the revenue have to be informed, a bit like when you pay in over £1,000 at a bank?
Think this is part of the money laundering regs - i.e. another regulation put in under the counter-terrorism excuse but in reality more targetted at civil offenses.What the OP suggests is completely illegal. It only 'works' if the Revenue doesn't find out. They might find out because of things like exchange of information treaties, also a lot of credit card companies have been bullied by the Revenue into disclosing which UK residents have offshore credit cards. You have been warned.
I was paid into an offshore account for nearly 2 years and transferred the money to a uk bank with no tax problems.
What I did do though was say I was leaving the country and claimed that years tax back before I started working overseas but still residing in the UK.
Use the offshore card, it will be fine.
Dave!
What I did do though was say I was leaving the country and claimed that years tax back before I started working overseas but still residing in the UK.
Use the offshore card, it will be fine.
Dave!
Bushmaster said:
What the OP suggests is completely illegal. It only 'works' if the Revenue doesn't find out. They might find out because of things like exchange of information treaties, also a lot of credit card companies have been bullied by the Revenue into disclosing which UK residents have offshore credit cards. You have been warned.
I'll warn my friend.NDT said:
Bushmaster said:
What the OP suggests is completely illegal. It only 'works' if the Revenue doesn't find out. They might find out because of things like exchange of information treaties, also a lot of credit card companies have been bullied by the Revenue into disclosing which UK residents have offshore credit cards. You have been warned.
I'll warn my friend.
Bushmaster said:
What the OP suggests is completely illegal. It only 'works' if the Revenue doesn't find out.
This is correct. It's the same as not declaring any other sort of income e.g. capital gains. You might get away with it, but you'd better not tell anyone because they could drop you right in it with HMRC. Plus you'd always worry that HMRC might catch up with you themselves at some point in the future.Caruso said:
Bushmaster said:
What the OP suggests is completely illegal. It only 'works' if the Revenue doesn't find out.
This is correct. It's the same as not declaring any other sort of income e.g. capital gains. You might get away with it, but you'd better not tell anyone because they could drop you right in it with HMRC. Plus you'd always worry that HMRC might catch up with you themselves at some point in the future.Dave!
NDT said:
Can the revenue check up on credit card spending?
In the UK they can. Your friend would need to have a bank account and associated credit card with a bank in a country with whom the UK does not have a treaty and that takes the privacy of it's customers seriously. Say, Switzerland. He would then need to spend the money outside of the UK.
Serious research would need to be undertaken as to the quality and privacy of any account used in such a manner.
All of this could be legal, however, simply by staying out of the country for a tax year. i.e. being non-resident in the UK. Your mate should consider whether or not the one month contract could turn into a year's work. If so - he should spend a year slaving his guts out. He could then legally return with the loot - given some tax planning with a proper PROFESSIONAL adviser. I think he could spend up to 90 days in the UK during the year? Maybe less...Eric would know.
The legal route is the way to go.
SVX said:
You need a Private Bank account with Credit Suisse or similar... CHF60K should be enough to open one.
This will provide you with some sort of protection, as there's no duty for them to supply the IR with details, however, the IR may still decide to look at your tax affairs for any other reason they see fit (or random selection), and if something looks irregular, they can then request details.Then it gets messy.
SVX said:
You need a Private Bank account with Credit Suisse or similar... CHF60K should be enough to open one.
What you need is a Panamanian foundation to own a BVI corporation wrapped in a Trust that owns an offshore life policy that owns the bank account with the credit card. Either that or stick to plain old cash and make sure that the 'consultancy' contract is in someone else's name.
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