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.
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.
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:-