Disguised Remuneration / Contractors Loan Scheme / Take home 90% of your income tax free
There are companies or individual that will sell you
A) Disguised Remuneration
B) Contractors Loan Scheme
C) 80 to 90% of your income tax fess.
What are all those schemes all about? in short all such schemes are tax avoidance and it will cost you a lot more of tax to pay at a later stage. a so called trust or a company will tell you that when you join us you will take 80% to 90% of your hard income tax free, so how come? The promoter / company will pay you a loan from the trust called remuneration trust or whatever name they use, all the same thing, so you as a contractor will work and will not get paid directly from the company that you are providing the work for, instead the agency or the umbrella company will charge the company that you doing the work for and, in return the so called trust company will charge the agency for the same amount, and this trust company will pay you a small income to show as a self employment income into your tax return and the difference will be paid to you as a loan, which is tax free and does not need to be entered into your self assessment return.
The promoter will tell you that this loan is not taxable and does not count as income, not only that but is HMRC approved, and will provide you with HMRC reference number. So how come?
Is all lies and is not true, the promoter must tell HMRC about the scheme and in return HMRC will give them a reference number for the scheme which have the full details.
Then you think you got away with the loan money and at the same time the promoter will charge you around 15% for their tax haven scheme, and suddenly they will disappear and a new trust company will be setup and the old trust company disappeared . Now what happens, HMRC will catch up with you if not this year next, if not next, before April 2019 will catch you, okay now all the loan, the 15% charges that was paid, interests, and penalty charges will be added up and full tax liability will be payable by you, and you are left alone no one to hold responsible except your self. so be very careful with such conning schemes.
Now if you have been using such scheme you should seek help from HMRC before April 2019, because you will end up paying all the money back, however if you seek help now, then you might be able to escape the interests and the charges for not paying your tax on time. Be very careful with such conning scheme , and speak to professional accountant who will help you to pay the right tax and save you a lot of money.
For more details about such schemes please get in touch with us and we will be happy to help further.