Returning to contracting....most tax efficient way?

[Bit of a Unit]

Start a new contract in the very near future.

Any current contractors/accountants have any advice around ltd companies, Umbrellas, these take home 90% sharks that claim all is legal???

Looking to do it in the most tax efficient way possible without falling foul of HRMC.

Cheers

Unit

[Burrow01]

If you are outside of IR35, then Ltd is still the best way I think

The "loan" mechanisms have recently beaten HMRC at a tribunal, but I think HMRC will be looking for a rematch...

Also depends on how long you are looking to be contracting for

[smckeown]

What a load of tosh. Offshore EBTs are still used successfully.

[Eric Mc]

Just ask Jimmy Carr.

Watch out for the GAAR in 2013.

[Burrow01]

smckeown said:

What a load of tosh. Offshore EBTs are still used successfully.

Not sure what you mean - thats what I was referring to - Rangers EBT case being upheld at tribunal

[Eric Mc]

Burrow01 said:

smckeown said:

What a load of tosh. Offshore EBTs are still used successfully.

Not sure what you mean - thats what I was referring to - Rangers EBT case being upheld at tribunal

1st Tier case only at the moment. There is a long way to go. This will probably take two years or so to resolve.

[Burrow01]

Hi Eric

Thats what I meant by

Burrow01 said:

but I think HMRC will be looking for a rematch...

EBT structure would be too risky/ stressful for me until the dust clears, but each to their own

[Eric Mc]

There are a new all encompassing Generally Applied Anti Avoidance Rules (GAAR) coming into effect next year. There may even be some mention of these in next week's Autumn Satement.

Days could be numbered for EBTS - although how effective the new GAAR will be is open to conjecture - and will probably be as much down to HMRC resources and willingness to act as anything else.

[no effort]

Bit of a Unit said:

Start a new contract in the very near future.

Any current contractors/accountants have any advice around ltd companies, Umbrellas, these take home 90% sharks that claim all is legal???

Looking to do it in the most tax efficient way possible without falling foul of HRMC.

Cheers

Unit

It depends on how much profit you're expecting to make.

If you think you are outside IR35 then bear in mind with a ltd company you can take a small salary and pay your self in dividends, even pay another share holder in dividends to reduce tax as well.

Tax efficient = Tax avoidance

If you will be making lots of money or will be inside IR35 then a loan scheme might be for you. My only advice on this matter is choose a company that has been around for a while and don't go with any that offer 90% take home pay.

[ringram]

Set up a franchise IP owner in a low tax country, then pay your IP license fees into it.
Totally legit, just ask Apple and Starbucks.
Helps to document your processes and TM them or similar. Transfer ownership to the offshore and bobs your uncle.

[Eric Mc]

The tricky dicky bit is extracting your personal income out of the offshore company without being subject to UK income tax and/or NI.

[no effort]

Eric Mc said:

The tricky dicky bit is extracting your personal income out of the offshore company without being subject to UK income tax and/or NI.

Just use a company debit card.

[Eric Mc]

no effort said:

Eric Mc said:

The tricky dicky bit is extracting your personal income out of the offshore company without being subject to UK income tax and/or NI.

Just use a company debit card.

Explain in detail how that works as a tax efficient form of personal fund extraction.

[no effort]

?

You buy stuff and take money from ATM's using the company card.

[Eric Mc]

no effort said:

?

You buy stuff and take money from ATM's using the company card.

And you escape personal Income Tax and NI how?

[samu23]

Give Glenn at Carpenter Box a shout, he looks after a couple of my mates who are contractors, top guy knows his stuff.

www.carpenterbox.com

[Tim330]

Eric Mc said:

no effort said:

?

You buy stuff and take money from ATM's using the company card.

And you escape personal Income Tax and NI how?

Eric,

Is dividend income from an overseas company taxed in the same way as dividend income from a UK Ltd?

[Bit of a Unit]

samu23 said:

Give Glenn at Carpenter Box a shout, he looks after a couple of my mates who are contractors, top guy knows his stuff.

www.carpenterbox.com

Thanks for the recommendation, will take a look.

[smckeown]

Burrow01 said:

Not sure what you mean - thats what I was referring to - Rangers EBT case being upheld at tribunal

There are many schemes used successfully. I don't think your advise is sound on that basis. Just scaremongering.

[smckeown]

The most efficient way is usually an EBT these days. However this is not without risk. Also the level of your company expenses is also a factor. With high expenses LTD is best,with low EBT is best.