Dodgy Tax Scheme's

sorcerer

With all these famous people doing dodgy dealings with their Tax, I wonder if somebody on a much smaller amount could also do the same thing, or do you have to have mega cash to do it.

So for example if I set up a business and persuade my work to pay into the business, and I take a "small" wage and the rest in dividends. Reducding my tax bill from 33% to something like 10%.

Then after I'm done, wind up the "business" and take the profit out.:j

SeniorSam

Often recommended by accountants and nothing wrong legally or morally.

Sam

TL13448

on that note i had a call from a "Tax Advisor" asking if I had a mortgage and about a little known way to have HMRC actually repay the capital part of my mortgage (just the capital not the interest)
Obviously he has something to sell and he is self employeed so very very cautions about this but all the same it sounds too good to be true

I have googled and searched the internet and can find nothing on this subject.

Have any of you heard of this?

Thanks
T

middlepuss

sorcerer wrote: »

With all these famous people doing dodgy dealings with their Tax, I wonder if somebody on a much smaller amount could also do the same thing, or do you have to have mega cash to do it.

So for example if I set up a business and persuade my work to pay into the business, and I take a "small" wage and the rest in dividends. Reducding my tax bill from 33% to something like 10%.

Then after I'm done, wind up the "business" and take the profit out.:j

I seem to recall that schemes like this don't work if you only sell your services to one company: HMRC see that you're actually an employee. But your idea would work if you in fact work for several companies. Business consultants and contractors who have several employers, either concurrently or serially, do exactly what you describe.

Pennywise

Only works if you're genuinely self employed as per HMRC's definition, which basically means being in business on your own account, i.e. risks & rewards, control yourself rather than being told what to do, etc.

If you carry on doing the same as you did whilst an employee, and continue to be paid on the same basis (i.e. time), then you'd probably fail the "in business" test.

To do a change as you suggest, you'd have to make substantial changes to the way you work, i.e. have more control over how, what and when you do the work, payment by results rather than time, ability to sub-contract work to others or use assistants etc etc.

pooch

SeniorSam wrote: »

Often recommended by accountants and nothing wrong legally or morally.

Sam

Maybe not illegal, but I wonder if DC will find that equally morally repugnant?

Or has he decided to keep out of individual's financial affairs now that the likes of Tory supporter Gary Barlow were disclosed.

Mind you, didn't Red Ken do a similar thing to what the OP is suggesting?
Morally Repugnant it is then :cool:

John_Pierpoint

It is not quite that simple ie 33% -> 10%, as the company has to pay tax too.

Comes into its own at higher levels of personal tax or if the company can provide a subsidised lifestyle to one of its owners (eg "Farming" )

The dodge of owning the company via a trust in the Channel Islands and then having its foreign owner liquidate it, is a bit complicated for ordinary individuals. Though managing to "emigrate" wealth to jurisdictions, without high levels of capital taxes, does have attractions for wealthy individuals.

danielanthony

Look up IR35.