tax aviodance schemes

danm

I have been contacted on a couple of occasions by an IFA based at the barbican in London called IFM (can't find a webste)

They sugest that they could save me 20-30% as a higher rate tax payer.

I told them that i was a PAYE tax payer with no self assesment, but they seemed pretty insistent tghat they could help.

I'm half tempted to go see them (nothings gained nothing ventured) but am sceptical and expect to get the hard sell on other products.

He said there were lots of reduction schemes that could be suitable, but when pressed wouldn't give me an example under the "can't be seent o give advise without KYC etc."

Any thoughts on what the angle could be here or what sort of thing they will suggest??

trevormax

there are several ways these schemes could save you money but it would depend on how much money you have and earn. If you just about go into higher rate then I cant see how they can save much. But if you are lucky enough to be getting over £100k for example, then they can save loads. One example of a scheme I know of requires a £5k investment which potentially saves the tax payer about £30k. Take off fee's and the initial £5k and they have saved about £20-£24k so well worth it.

Problem is HMRC dont like people using avoidance schemes and try very hard to stop them. If there is a good scheme that works, HMRC will change the rules to close the loophole so they dont last for long. Even if you are successful, HMRC will start to look into your tax affairs to see if they can get you on something.

They usually dont charge for the first meeting so might as well see them.

kinsington

Why not say you may be interested but too busy to make time at the moment. Ask them to send you some literature to look over. If they are serious it will also give you a chance to see who they are and what their literature says about them.

You could then check out the firm and see if they are regulated, and also check with an accountant or tax advisor on the basis of what they seem to be offering.

olivetti

They take advantage of HMRC's 'process now, check later' regime. In effect they put claim through which, say, gives you a refund of £5000. At this point HMRC will send the cash but won't look at the detail of the claim. The IFA will take £2500 and then HMRC may in a few months enquire into the refund and decide it was not due and send you a bill for £5000. In this scenario you would be down £2500 and you might finf the IFA not answering your concerns. Be very careful, if you are a PAYE taxpayer with fairly simple affairs then there is very little that you can legitimaly claim for and any refund that you may be due will be from benefits/pension payment which you will be able to check yourself easily by comparing your P11d and tax code.

Cook_County

You should:

1. Ask meticuously for their qualifications.
2. Request and read a copy the counsel's opinion confirming that this scheme works.
4. Ask what insurance cover is available if it fails.
5. Ask their track record.
6. Get written confirmation that the scheme is registered with HMRC.

dunstonh

IFAs typically offer packaged products which are generally structured to work in certain ways within HMRC guidelines. Use of these to reduce your tax is acceptable.

The most common occurance from IFAs is the use of investment tax wrappers. Unwrapped (unit trusts), ISAs, onshore investment bonds, offshore investment bonds, pensions, VCTs etc With most of these you can have identical invesmtents but in different tax wrappers. This can range from avoiding higher rate tax, CGT, reduction in age allowance etc.

That said, you do tend to find that decent IFAs do not cold call people.