85% – 90% Limited Company Returns Onshore

Limited Company Returns

Limited Company Returns

British contractors can now get limited company returns of 85% to 90% returns on their income – or even higher. We have one company which offers 92% returns.

Those British contractors who paid the IR35 Tax are the worst off of all contractors as they pay tax as if they were a permanent employee.

Onshore Umbrella Company Contractors

Onshore umbrella company contractors are next worse off. They were able to claim up to 5% of their expenses against tax and so were able to save a little.

However, the Chancellor intends to take away their ability to offset expenses such as travel and subsistence against tax. He intends taking this away in April 2016. He is currently in consultations as to the best way to do this.

British Limited Company Contractors

A bit better off are the standard limited company contractors. It is reckoned that they pay £10,000 a year less tax than umbrella company contractors, on average.

Better still, are offshore umbrella company contractors who can get 84% to 90% returns on their money earned.

They are able to do this because of three British laws which explain, also, why the Government doesn’t stop offshore tax avoidance  :-

Money Sent Offshore Not Taxable

1.  Money sent offshore is not taxable. It used to be but that was one of the first laws that Mrs Thatcher brought in when she won the 1979 election.

Tory Grandees, like Lord Ashcroft, the Tory party’s biggest donor, Ian Cameron, David Cameron’s father, and Lord Astor, his father-in-law, took advantage of this.

They set up schemes that would save them a fortune in tax, and, in Ian Cameron’s case, to allow others to save a fortune in tax.

Loans Not Taxable

2.  The second law that makes this feasible is that loans are not taxable.

So, what happens is that British contractors pay their money to an offshore company who invest it for them.

The scheme pays the contractor the equivalent amount in loans.

Supposedly the contractor will pay the full amount of tax on that money when it comes back onshore. Of course it never does for reason.

Contractor Loans Not Inherited

3.  The third law that makes it feasible is that you don’t inherit loans. The loan debts of one generation do not pass to the next. Your loans die with you. This means that the loans you took out in lieu of your income will eventually pass away with you.

The Conservatives won’t change law as so many of their own make use of this to save themselves a fortune. The big hedge funds, who are such big donors to the Conservative party, would lose out if this was changed.

They won’t change the second law, i.e. they wouldn’t make loans taxable, as this would cause chaos in the banking sector. This is so lucrative worldwide for the UK, which has a dominant position in Europe in it.

They wouldn’t change the 3rd law, either, to pass on one persons loan debts to the next generation.

Can you imagination the outcry that would cause among Tory supporters if they did that?

So, that is why offshore umbrella companies work for British contractors.

Onshore Limited Companies

There is an alternative, now, however.

There are onshore limited company solutions which take advantage of efficient tax planning to give contractors similar returns that they can get from using offshore umbrella companies. However, all of the money stays onshore.

British contractors can get limited company returns in the same 85% to 90% bracket as they would for using offshore umbrella companies. However, all of the money stays onshore and passes through their own limited companies in the UK.

Companies Offering High Limited Company Returns

 Compare the Umbrella Solutions offer British limited company returns of 85% to 90%.

Those solutions have saved British contractors a fortune for years.

Keep More of Your Income

Keep More

Keep More of Your Income

You can keep more of your income, i.e. 85% or more using one of three methods:-

Tax Efficient Umbrella Companies

There are both onshore and offshore umbrella companies. Using the standard onshore one will mean that you lose 40% or more of the money you earn.

This could be even more, however, after the Chancellor ruling that umbrella contractors can no longer offset travel & subsistence against tax.

One way to get around this was to use an offshore umbrella company. Another way is to use a more tax efficient onshore one. That’s so you can keep 85% of your money with one of those.

To lean more click on Umbrella Companies

Tax Efficient Limited Companies

The majority of IT Contractors use Limited Companies. These are termed Personal Service Companies when one person earns most of the income in the company.

However, most freelancers don’t use their companies in the most tax efficient way.

They could retain 85% of the money they earn and more if they optimised its use.

So, to find out more click on Limited Companies

Apply for More Information on Both Options

Fill in the form below to get your information pack on how the above three work. Click Y against each of those options for which you want to receive the Infopack.

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Offshore Umbrella Company Returns

offshore umbrella company list

Offshore Umbrella Company Returns

So, what are the offshore umbrella company returns on your hard-earned cash compared to other options?

First of all, what are the other options?

Firstly, you can just pay up on your IR35 tax. Secondly you can operate through a Limited Company (or Personal Service Company). Thirdly you can operate through a PAYE Umbrella Company. Finally, you can operate through an offshore umbrella company.

Offshore Umbrella Company

Offshore Umbrella Company Returns can vary anywhere between 85% and 90%, depending on your income. Using offshore umbrella companies are by far the best method of keeping most of your money.

So, if you earned £100,000 you would expect to keep £85,000 to £90,000 of the money you earn.

Limited Company (Personal Service Company)

This is the next best option. However, you would still be £10,000 to £15,000 down than the offshore umbrella company returns. You would expect to keep around 75% of your money. So, you would keep around £75,000 if you earned £100,000.

Onshore Umbrella Company

Using a normal onshore umbrella company would let you keep around 60% of the money you earn. This means you would keep around £60,000 of the £100,000 you earned.

PAYE Operator

If you pay the IR35 tax or use normal PAYE, you would get back around £55,000 of £100,000 that you earned.

There are many reasons for using one or the other. However, if it is a bean count, and you are just going for the most lucrative option then the offshore umbrella company returns of up to £90,000 makes it a no-brainer for contractors.

You could be keeping up to £30,000 a year more by using an offshore umbrella company rather than using a normal onshore umbrella company. That mounts up over time. That money escapes you.

To find out more about offshore umbrella company returns you should click on Offshore Umbrella Company Directory

offshore umbrella company list

Offshore Umbrella Company List

Offshore Umbrella Companies – How Much Money will I keep?

How Much Money

How Much Money Will I Keep

Contractors want to know “How much money will I keep by using offshore umbrella companies?”

Is it worthwhile operating through Offshore Umbrella Companies? How much money will you save a year by operating this way?

Say you are a contractor who is earning just over £400 a day – which is around £100,000 a year.

If you operated PAYE you would probably keep about £64,000 of that.

Offshore Umbrella Companies Viable Alternative

Offshore Umbrella Companies Viable Alternative to PAYE Umbrella Companies and Limited Companies

If you operated through a Limited Company you might keep around £75,000 of that.

If you operated through one of the offshore umbrella companies you would keep something between £85,000 and £90,000 of that depending on how much you earn and your circumstances.

Operating Through Limited Company

So, if you were PAYE you would contribute about £36,000 a year towards the Treasury.

Therefore, if you operated through a Limited Company this loss would be around £25,000 a year.

However, going through one of the offshore umbrella companies you would give up between £10,000 and £15,000 a year. Most freelancers would be towards the lower side at 85% but if they got a really good contract rate they could probably negotiate up towards the higher mark.

It’s probably worthwhile getting a quote from 3 or 4 companies to see what is the best offer. You’ve worked hard enough for it and you might as well keep as much as you can of it.

Government Complaints

The Government complain about it but have no real will to stop it. As the top dog in Google asked, why are they complaining when it is they who created the rules that allowed tax avoidance in the first place?

Legal Tax Avoidance for UK contractors

Legal Tax Avoidance schemes used by UK contractors

It was the Thatcher Government who changed the rules to allow money to go offshore untaxed which gave rise to this tax avoidance in the first place. If they were to abolish it now it would hit many of the Conservative Party donors.

As one of top dogs at HMRC said recently many of these schemes are completely legal. If the Government want to make them illegal they have to change the laws. Until then, offshore Umbrella Companies are legitimate ways for contractors in the UK to avoid tax quite legally.

To see details of these offshore umbrella companies and how much money you would keep see Offshore Umbrella Companies Directory

Umbrella Companies Dilemma over Supervision, Direction and Control

umbrella companies dilemma on supervision, direction and control

Umbrella Companies Dilemma

The Chancellor Osborne’s Autumn Statement and 2016 Finance Bill has caused a huge umbrella companies dilemma.

The Chancellor has said that all Umbrella Company contractors will be deemed to be under the Supervision, Control and Direction of their clients – unless it can be proved otherwise.

This would mean that they are no longer able to offset travel and subsistence expenses against tax.

As this is the main expense that umbrella companies can claim for their contractors, it means that their contractors are going to take a huge hit in their pockets.

Umbrella Companies will have to tell contractors this before April and before they notice a huge chunk mission from the money returned to them.

Umbrella Company Expenses

Umbrella Company Expenses explained

Leaving Umbrella Companies or Staying

It will also mean that many of those contractors will have a decision to make, whether to stay with their brolly or to take themselves out of IR35 and use a personal service company.

Some contractors will stay and some will go.

They have to pay upwards of £100 a month to umbrella companies, basically just to pay them.

This was offset by what they would save on an Accountant and even more by what the umbrella company could offset in taxes for them.

What they gained was more than they paid out to the umbrella company.

So, it was worthwhile for them to stay in the umbrella company rather than pay the IR35 tax.

Autumn Statement and Finance Bill

However, that situation has now changed after the Autumn Statement and Finance Bill 2016.

The main expense they could offset against tax was the travel and subsistence expenses.

That will be gone from April 2016.

So, many umbrella company contractors will now be paying the umbrella companies more than they are saving in tax.

The contractors will have a decision to make and so do the umbrella companies.

Umbrella Company News UK Contractors need

Umbrella Company News for UK contractors

Changing the Contract for SDC

However, the brollies will now have a dilemma.

Should the umbrella companies try to take contractors outside the Supervision, Direction and Control of clients?

In terms of the contract this should not be too hard to do.

The contract would say that for any task, or piece of work, the client would have to agree this with the contractor.

They would have to agree the estimate too.

Employers tell permanent workers what to do and how long it should take. Suppliers, with a contract for services, would agree with their customer what should be delivered and when.

Changing Contractors Working Practices

As I said, it would be easy enough to change contracts to reflect this. After all, umbrella companies normally have a cosy relationship with agencies who supply them with contractors.

Providing the client is reasonable, and most are, they would be happy to change the contractor’s working practice to match the contract.

Both parties would agree the piece of work,  as would the estimate. The contractor would complete the task unsupervised, using his, or her, own knowledge and experience.

Of course, they are taking a bit of a risk. If they got it wrong they could get hit for the missing tax.

However, theres is no reason to get it wrong,

It’s fairly simple. The contract HAS changed. The relationship between the contractor and the client HAS changed to a customer / supplier relationship in terms of agreeing what has to be delivered and the time it should take.

So, it is not fraudulent. It is just a fact – a change way of working.

Working through Umbrella Companies

Working through Umbrella Companies for maximum returns

Umbrella Company Options and Choice

So, here’s the umbrella companies dilemma.

Here is their Catch-22.

If they do help the contractor to be unsupervised, working without direction and uncontrolled by the client, this would get the contractor his travel and subsistence expenses back again.

That might save him, or her, £5,000 a year.

It might make it more worthwhile to stay with the umbrella company.

Contractor Now Outside IR35

However, it would also take him, or her, closer to being outside of IR35.

This would mean that he, or she, could now work through a personal service company.

Personal service company contractors pay an average of £10,000 a year less in tax than an umbrella company contractor.

There are three main IR35 factors which point to you being caught by IR35 or outside it.

Major IR35 Factors

They are:-

1 Supervision, Direction and Control

2 The Right of Substitution

3 Mutuality of Obligation

IR35 and UK Contractors - Inside or Otsideu

IR35 and UK Contractors and the tax they pay

Right of Substitution Contract Clause

We know, from a previous court case, that you can easily insert the right of substitution into your contract and a named substitute and that the burden of proof is with HMRC to prove that it was a sham.

They could only do that if the client triggered the substitute clause and the substitute failed to show up. That court verdict must have had HMRC gnashing their teeth.

So, of the three main pointers to IR35, putting a right of substitution clause that will never be triggered into your contract would allow you to tick that box.

The umbrella company has just helped the contractor to be outside the Supervision, Direction and Control IR35 factor.

So, the contractor is able to tick off two of the three main IR35 boxes.

Keeping More of a Contractor’s Income

He, or she, would naturally think “Maybe I can get outside IR35 and set up a personal service company so that I could save not just the £5,000 for travel and subsistence but also another £10,000 a year on top of that”.

So, that is the umbrella companies dilemma.

Should they arrange with the agencies and clients to change the contracts fo some of their contractors to take them outside the Supervision, Direction and Control clause?

This would mean that they could still claim their travel and subsistence expenses which might come to more than the monthly fee that the contractor pays to the umbrella company?

Intermediaries Rules for Contractors

Intermediaries Rules for Contractors over IR35

Big Question for Contractor Umbrella Companies

The big question for them is this:-

Will getting contractors outside Supervision, Direction and Control of the client be more likely to get umbrella companies contractors to stay with them or be more likely to show them how it is done and make it easier for them to leave the umbrella and set up a personal service company.

That’s the 64 million dollar question for umbrella companies.

They are going to have to decide, before April, whether they are going to open that box or keep it shut.

They are going to have to decide whether to twist or stick.

That is the umbrella companies dilemma and they need an answer to it well before April.

So, what will they do?

I’m absolutely certain which option they will take – but that is for another article.

Umbrella Company Alternatives

If they don’t answer it correctly, contractors could jump ship to Limited Companies or Offshore Umbrella Companies.

Tax Efficient Limited Partnerships

Tax Efficient Limited Partnerships for UK contractors

 

Umbrella Companies Contractors Alternatives After April

Umbrella Companies Contractors Alternatives

Umbrella Companies Contractors Alternatives

Are you looking for umbrella companies contractors alternatives?

Umbrella Companies in the UK are under a severe threat that would be a severe blow to the solar plexus. It would leave 200,000 umbrella companies wondering whether it would be worthwhile staying in an umbrella company or looking for another solution.

The Chancellor has already told us that he is going to abolish the ability of umbrella company contractors to offset travel and subsistence expenses against tax.

Umbrella Company Recommendations for UK Contractors

Umbrella Company Recommendations for UK Contractors

It is mainly contractors who fear that they are inside IR35 who join umbrella companies.

Disguised Contractors in Umbrella Companies

The umbrella companies disguise these contractors as employees of the umbrella company and they deduct PAYE from the contractors’ income.

In all other ways the contractor behaves like a contractor.

The umbrella company performs no other function other than to disguise contractors as employees for tax purposes and pay them accordingly.

They allow for tax deductions like travel and subsistence, pay the contractor and send the PAYE to the taxman.

If contractors were to just pay the IR35 tax they would not be able to claim much in the way of tax deductions.

Tax Deductible Travel and Subsistence Expenses

However, using the ruse, or device, of the umbrella company, they are able to claim certain things against tax.

These include travel and subsistence, equipment costs (e.g. their PC), pension contributions and membership fees of trade organisations.

However, the most important of these is the travel and subsistence that they can claim as deductible.

Conservatives Bashing Contractors Again

However, the Conservative Government, in the guise of Chancellor George Osborne, intends taking it away from them.

To be fair, they are also going to take it away from personal service company contractors too.

They couldn’t be fairer than that, could they?

Umbrella Company Contractors Monthly Fee

Umbrella Company contractors pay a fee of normally over £100 a month for their umbrella company, basically, to pay them.

They must be the only ‘permanent employees’ who their company charge  just to pay their salaries.

It was worthwhile, previously, for contractors to pay that fee because they would get more back in tax-deductible allowances than their month fee.

Doing a financial bean count they still came out on top.

However, a financial bean count, after this, may well show that the money they are paying their umbrella company to pay them, and do their admin, is more than they are able to claim back in tax-deductible expenses.

They may as well just pay the full  IR35 tax. It might be cheaper for them to do so.

Contractors Staying with Umbrella Companies

Some contractors will stay with the umbrella companies. They will be those who are happy to pay the umbrella company to do their admin for them even though they lose out financially.

There will also be those contractors shoved unceremoniously by their unscrupulous agencies into umbrella companies, against their interests, so that the agencies can continue to get ‘bungs’ from the umbrella companies for doing so.

Inducing contractors to join an umbrella company is illegal under the 2010 Bribery Act – but we know it happens.

However, many contractors will be looking for alternatives to umbrella companies.

Here are some umbrella companies contractors  alternatives worth looking at.

Personal Service Companies (Limited Companies)

Although the Conservatives intend to take the travel and subsistence allowance from personal service companies too, there are still lots of other tax-deductible expenses that a limited company contractor can claim.

Indeed, it is reckoned that limited company contractors pay an average of £10,000 a year less in tax and NI contributions than an umbrella company contractor.

So, umbrella company contractors may seek to change their contracts, and working practices, to take themselves outside of IR35.

Many of those contractors using umbrella companies were those who weren’t sure if they were inside IR35 or outside IR35.

They didn’t want to take the chance of an IR35 investigation which may take years and cost them tens of thousands of pounds of back tax and fines if they lost.

However, with these changes to allowances that they can claim they may well be more willing to take a little bit more risk for more rewards.

Tax Efficient Limited Companies

These are similar structures to the common or garden limited companies.

However, they manage contractors income in the most tax-efficient way to give them returns of 85% or more.

Limited company contractors can continue to use their existing limited companies going this route.

An example of one of those, and how they do it, is here – Tax-Efficient Limited Companies.

Offshore Umbrella Companies

Multi-national companies and high net worth individuals, as well s hedge funds, have long used offshore companies to save on tax.

Now contractors are taking advantage of UK tax laws to do so too.

They can get keep 85% or more of their income using these.

For more information see Offshore Umbrella Companies List for UK Contractors.

The contracting world is now very different to the one that we are used to.

Those that plan in advance will be those who will not miss out.

To be forewarned is to be forearmed.

Best Financial Options for Contractors Now

Best Financial Options for UK Contractors

Best Financial Options for Contractors

We look at the best financial options available for UK Contractors.

Retention levels available for contractors

One of the key decisions for contractors is which method to contract through.

This impacts on the amount of your fee you actually keep after taxes, administration and accountancy.

They have put this further into the spotlight following the changes to dividend taxation and travel and subsistence expenses for employees.

However, these changes will have a negative impact on the amount of money that will end up in your bank account.

So, contractors will pay extra amounts in tax and national insurance once the changes come into force.

Below is a summary of the options available and a summary of their position for tax and the likely level of retention a contractor can expect.

For the purposes of the article we will assume that the contractor is a single IT worker, of 40 with a standard tax code and a 12 month contract for £350 per day.

He works 5 days per week and 48 weeks of the year (annual income of £84,000).

This worker spends £8k per year on travel and subsistence.

Self Employed Contractors

There has been no significant impact to the status of a self-employed person. As before, the key obstacle is IR35 (and the rules are going to be subject to revision).

So, a self-employed person has to pay Income Tax and class 2 and 4 National Insurance.

Other than the deduction of expenses that relate directly to their employment, there are no commonly used methods of tax planning.

In addition, the self-employed person has to either undertake all administration for invoicing and collection.

Plus they also have the responsibility for making payments for tax when they fall due, or engage an accountant to do this.

There may be a large tax bill at the end of the period to settle.

So, the contractor here would retain 67-78% of their income.

Limited Company Contractors

The ability to use dividends is a key element in tax planning for those contractors who operate Limited Companies.

Dividends are taxed at a much lower rate than salary. There is currently an effective rate after tax credit of

  1. 0% up to £31,785,
  2. 25% above this up to £150,000, and
  3. 30.56% on any earnings above £150,000.

Going forward the removal of the tax credit on dividends will result in dividends being taxed at 10% up to £31,785.

Although there is a £5,000 tax-free dividend allowance.

They will tax them at 32.5% above this up to £150,000. They will aslo tax them at 37.5% on any earnings above £150,000.

So, this change will have a huge impact on contractors that operate a Limited Company. The benefit of making drawings in the form of dividends rather than salary has been greatly reduced.

In the 2014-15 tax year, our Limited Company contractor could retain 72.92% of their income.

However, moving forward into the 2015-16 tax year this will drop to 65.79% due to the changes in dividend tax.

There will, also, be costs associated and administration associated with the operation of a Limited Company.

There will, also, potentially be the need to control invoicing and collect payments.

Umbrella Company Contractors

Becoming an employee of an Umbrella has been a popular method of tax planning and also reducing the administrative burden for contractors.

The Umbrella will manage all invoicing, collection and taxation matters and pay the contractor their net fee.

By becoming an employee of the umbrella, it enables the company to deduct travel of subsistence expenses. These are not allowable deductions of self-employed workers.

Therefore, in the case of our contractor, using an Umbrella under current rules would provide a retention of 63.96% of their fee.

So, going forward into the new rules for Umbrellas, the retention drops to 59.30%.

Limited Partnerships Compliance with UK Tax Rules

Among the rules they have ensured their compliance with are:

1. Transfer of Assets Abroad Legislation – Chapter 2, Part 13 ITA 2007

2. DOTAS

3. GAAR – Section Part 5 FA 2013

4. IR35

5. Part 3, Chapter 7, ITEPA 2003

6. The newly announced Onshore Intermediaries guidance, 9 July 2015

Best Financial Options for Contractors Summary

So for each of the four options, the expected retention after taxes and fees is as follows:

Route                  2014-15  2015-16

Self Employed        67.78%      67.78%

Limited Company  72.92%  65.79%

Umbrella                   63.96%  59.3%

Tax Efficient Limited Company –  No less than 85%  No less than 85%

So, choose the best financial options for you.

Personal Service Companies Crackdown by Government

Personal Service Companies Crackdown

Personal Service Companies Crackdown by Government

Chancellor Osborne, in his Budget today, has launched a fierce Personal Service Companies Crackdown.

He is determined to stop contractors who use limited companies as personal service companies from claiming travel and subsistence expenses against tax.

This personal service companies crackdown is where there is an intermediate between a contractor and a client, e.g. an umbrella company or an agency.

This will, therefore, make it more expensive for UK Contractors to contract.

IR35 Tax Changes

Also, the Chancellor wants to look again at IR35 tax. He is not happy that it is working properly.

When he says that he wants to look at IR35 again we can assume that he wants to strengthen IR35 as he promised in a previous Autumn Statement.

So, he has already hired a 36-strong IR35 compliance team to do this.

Limited Company Dividends

Another area where the Chancellor has hit UK contractors is in the area of dividends.

He has, effectively, raised the tax rates on dividends. This will be a disincentive for contractors to operate through limited companies.

They have, traditionally, paid dividends rather than pay salaries as the tax was lower.

Dividends were not subject to National Insurance as salaries are.

Now that differential has been taken away with his personal service companies crackdown.

He has hit umbrella companies, as well, He has taken away the meagre tax relief on travel and subsistence that they got. Therefore, it is now, financially, hardly worthwhile using an umbrella company now.

 

David Cameron’s Dad’s Offshore Money – Where Did it Go?

David Cameron's Dad

David Cameron’s Dad’s Offshore Money

What happened to the offshore money built up by David Cameron’s Dad?

One of the first things that Mrs Thatcher did, when she came to office in 1979, was to change the laws so that money leaving the UK was untaxed.

This set off a whole load of offshore money-making schemes for Tory Grandees and party contributors such as Lord Ashcroft, who was the Tory party’s main contributor, and Lord Astor, David Cameron’s father-in-law.

Another of these was David Cameron’s father Ian using his Blairmore vehicle.

Offshore Umbrella Companies for contractors

Offshore Umbrella Companies for contractors to save tax

Ian Cameron – No UK Tax

For 30 years Ian Cameron was setting up offshore schemes that meant his customers would not pay UK tax.

He also invested his own money in tax havens.

In all that 30 years he never paid any UK tax on the offshore money.

You would have thought that he had many millions.

Ian Cameron’s Worth

How much do you think that someone, who had spent 30 years helping people shelter from UK tax, and paying no UK tax for 30 years on his own offshore income, would be worth?

I would have guessed he would be worth many millions, perhaps in the tens of millions and maybe even in the hundreds of millions.

So what did he leave in his will?

David Cameron’s brother got a house out of it. David Cameron, himself, got £300,000 and his sister got some money as well.

That strikes me as being a piffling amount of money for a guy who had been helping others avoid UK tax for 30 years and who had paid no UK tax on his own offshore money for 30 years.

Ian Cameron’s Money

So, what happened to all the money that he must have made?

Paying UK Tax

Paying UK Tax

It’s possible that he gave it to his children to avoid death duty before he died.

It’s also possible that it is still out there in offshore funds in places like Panama, Jersey, the Bahamas etc.

As there is no revelation, no one would ever know.

We only know, because of a firm of lawyers being hacked in Panama, that David Cameron sold shares in an offshore trust in 2010, before he became Prime Minister, for £31,500 – a profit of £19,000.

No Capital Gains Tax on Offshore Profits

Although he paid dividend tax in the income he got from it, he didn’t have to pay any capital gains tax.

It’s now been discovered that there were another couple of companies in which he had shares that were held offshore.

None of this would have been known without the Panama lawyers being hacked.

Downing Street Statement

Downing Street first said that Cameron had “no shares, no offshore trusts, no offshore funds”.

Later this was clarified to: “The prime minister, his wife and their children do not benefit from any offshore funds.”

Later again Downing St said that there were “no offshore funds or trusts the family would benefit from in future.”

That left wiggle room about the past.

Contractor Tax Avoidance sches on Isle of Man

Contractor Tax Avoidance schemes

Where’s the Money?

So, what did happen to all the millions that David Cameron’s dad must have made?

Why did he leave such a relatively small amount of money to his children?

Did he manage to give them it before he died?

Was he spectacularly unsuccessful over 30 years in a field where making heaps of money seems to be easy?

Or are there other offshore trusts out there, in other tax havens, that only David Cameron and his family know how to get hold of?

In recent years UK contractors have been taking advantage of measures, both offshore and onshore, to minimise their taxes, just like David  Cameron’s dad Ian, David Cameron, George Osborne, Lord Ashcroft and Lord Astor.

What’s sauce for the goose is now sauce for the gander.

For an explanation of those tax minimization opportunities for contractors, where they can keep up to 90% of their money, see Onshore and Offshore Umbrella Companies List.

101 Limited Company Structure gives Greater Returns

101 Limited Company Structure

101 Limited Company Structure

The 101 Limited Company Structure allows you to make drawings from your company in the most efficient way in order to save the maximum in tax for UK contractors. It is important to make drawings from your company in a very structured way if you are to save the most money.

The 101 Limited Company Structure means that you can get the best return on the marketplace. It does that by implementing an efficient and safe structure. It is fully compliant with GAAR and also with all current and known future tax legislation changes.

All of the tax planning strategies are fully compliant with UK legislation. This has been ratified by Queens Council opinion, as well as in-house barristers.

Bookkeeping and Accounts

Those operating the 101 Limited Company Structure, do all the accounts including bookkeeping and invoicing, as well as annual returns. They can also advise on investment strategies for contractors in order to maximise their income.

By using a 101 Limited Company Structure you can increase company profits without any increase in sales. In fact, using the 101 Solution is the quickest and easiest way of raising company profits.

Most contractors, without realising it, operate in a very tax inefficient way. As a result, they pay far more to the taxman than they need to do. The 101 Limited Company Structure will help change this.

Inefficient UK Contractors Wasting Money

UK contractors tend to act in a very tax inefficient way and this holds back both their businesses and their profitability. It means they have to work for more years than they need to.

One company has been operating the 101 Limited Company Solution for contractors for 9 years now. So, they know what they are doing. They have helped many contractors this way.

To find out more, just click on 101 Limited Company Structure Solution or to apply just click on 101 Limited Company Solution

offshore umbrella company list

Offshore Umbrella Company List

Isle of Man Umbrella Companies happy with Budget

Isle of Man Umbrella Companies for contractors

Isle of Man Umbrella Companies

Isle of Man Umbrella Companies are happy with the latest budget.

The Chancellor took aim at tax avoidance in his budget today – especially offshore tax avoidance. However, the Isle of Man Umbrella Companies appear to have got away relatively lightly compared to Jersey and Guernsey.

The Chancellor has acted on the intermediaries tax loophole where UK companies avoid payroll tax by routing their payroll offshore in places like Jersey and Guernsey.

Isle of Man Umbrella Companies

Isle of Man Umbrella Companies for UK contractors

Often the temporary workers used by those UK companies didn’t even know it was happening. This is even though it could have led to them losing sick pay and maternity pay entitlement.

Illegal Schemes

However, these schemes are illegal in the Isle of Man and one company was fined for trying to operate one.

The Chancellor also said that he would work with the Isle of Man, Jersey and Guernsey over disclosure. However, the former has been ahead of the game here and has worked closely with HMRC and the Government.

The people targeted are those who hide money in offshore bank accounts.  It’s not about contractors who use offshore umbrella companies.

The companies will feel that they got away relatively lightly.

Contractors can retain 85% of their income by using these companies. Many contractors are now doing so.

Here is one here:-

Compare the Umbrella

 

Offshore Umbrella Companies Boosted by UK Government

Offshore Umbrella Companies Boosted

Offshore Umbrella Companies Boosted

We have now got offshore umbrella companies boosted by the UK Government.

The UK Government is inadvertently boosting them by their attacks on freelancers’ use of Personal Service Companies. The UK Government appear to want freelancers to get out of Limited Companies and get into Umbrella Companies. The UK Government can then grab more income tax and National Insurance Contributions from them.

Although, to a certain extent they are managing to do this, more and more fish are escaping their nets and slipping into the offshore umbrella companies net. This means that the Government will get very little tax at all from them if any.

Legal Offshore Companies

Most of these schemes are completely legal. The freelancers’ money goes to the offshore umbrella company as an investment. They get back a loan in lieu of the investment. They use the investment as collateral.

One such scheme has the freelancer’s money paid as an investment. This is then invested in a broad spread of 150 telecoms companies. They insure the investment against loss. Therefore, as they insure the investment against loss the offshore umbrella company is able to loan money to the contractor in lieu of that investment.

When the contractor wants to cash in the investment he, or she, will get any profit from the investment in the telecoms companies. All they will pay is Capital Gains Tax on any profit they have made.

Conservative Party

Of course, this is all completely legal. The Conservative Government knows that as it was they, under Margaret Thatcher, who legalised it in 1979 within a month of coming to office. Perhaps it was payback time for their sponsors.

A number of Tory Grandees have used it successfully. They include David Cameron’s father Ian, Lord Astor his father-in-law, Lord Ashcroft the Conservative Party’s main donor and fundraiser. Of course, the Chancellor himself, George Osborne has a family trust of £4.5m offshore.

IT Contractors

Of course, these schemes were never meant for the likes of IT Contractors and other freelancers. However, they cannot just exclude IT Contractor from this tax avoidance gravy train. If they stopped it they would be cutting off their noses to spite their faces.

So, contractors are happy to see offshore umbrella companies boosted by the Government.

Check out our Which Umbrella Company guide and our Which Contractor Accountant guide.

Office Holders Boost for Offshore Umbrella Companies

Office Holders

Office Holders IR35 Legislation

The Chancellor has given Offshore Umbrella Companies a major boost by his new office holders changes to the IR35 legislation. The more that the Chancellor tries to move contractors out of Limited Companies and into Umbrella Companies the more contractors now approach offshore umbrella companies about operating through them. They have been thriving recently.

Of course, the Government would like to knock these out. However, this is proving difficult for them as the companies are not in their jurisdiction. Also the courts have ruled that the system that they use is perfectly legal.  This is where contractors are given loans rather than paid income.

PAYE Umbrella Companies

HMRC and the Government would like to see all freelancers in PAYE Umbrella Companies. They don’t want them in Limited Companies. They certainly don’t want them in offshore umbrella companies. However, their policies appear to be driving more and more contractors that way rather than becoming an effective employee of an onshore PAYE Umbrella Company.

IPSE Survey

There’s a lot to play for here. An IPSE survey showed that there were now 1.6m people who call themselves Freelancers in the UK. Only 200,000 of these are in Umbrella Companies. The Government take around £10,000 in tax and NICs more from an Umbrella Company contractor than a Limited Company contractor. There is a lot of money at stake for the Government. So, they want to herd as many contractors as possible out of Limited Companies and into Umbrella Companies.

However, if those contractors leave the onshore companies, and go offshore, the Government gets nothing at all in tax. They appear to be helpless to prevent this. This office holders legislation will cure nothing.

For a review of offshore umbrella companies see Offshore Umbrella Companies