80k deposit but cant get any type of Mortgage please help

jojo_1982

nospaceforbaby wrote: »

now looking at porting the mortgage, transferring to another property, still with NRAM same deal monthly payment etc but just transferring the property over, then I could use the 80k to reduce the debt down to 160 and monthly payment either down or repayment.

Could you get a new larger property for the same as what your flat is worth? I would have thought you'd have to pay a lot more.

nospaceforbaby

jojo_1982 wrote: »

Could you get a new larger property for the same as what your flat is worth? I would have thought you'd have to pay a lot more.

no, houses in Cornwall are cheap

jojo_1982

Well done on convincing the wife to move to Cornwall!

[Deleted User]

Mortgage_Mark wrote: »

Let's look at it this way; for ease of calculation, let's say his Ltd Co has a £100k turnover. Probably around £80k of that goes out of the company as administrative expenses/cost of sales - completely tax deductable - which are actually him paying himself to consult to the company..

Which he would pay tax on... can you please outline a tax avoidance scheme that would put an extra £50,000 in the pocket of someone with a business generating £100,000 in profit per year, if they're currently paying the highest amount of tax (PAYE)? What about £200,000, is it possible to turn £95,000 take home (on £200k as per my figures above) into £145,000 take home? He absolutely could avoid a lot of tax by keeping the money within his company, but that would not fit his story.

nospaceforbaby

jojo_1982 wrote: »

Well done on convincing the wife to move to Cornwall!

thank you, I spoke with NRAM today and it looks like they are going to allow me to port the mortgage over, I am hoping for confirmation next week - Cornwall seems like great value, I geuss the house prices are low because there is limited work available in that region so its good to be making my home working situation pay for me for a change

nospaceforbaby

citricsquid wrote: »

Which he would pay tax on... can you please outline a tax avoidance scheme that would put an extra £50,000 in the pocket of someone with a business generating £100,000 in profit per year, if they're currently paying the highest amount of tax (PAYE)? What about £200,000, is it possible to turn £95,000 take home (on £200k as per my figures above) into £145,000 take home? He absolutely could avoid a lot of tax by keeping the money within his company, but that would not fit his story.

the business does around 150-180k a year in turnover with annual business costs of about 7k, the remaining revenue goes through bestpay at 90% return

Mortgage_Mark_2

citricsquid wrote: »

Which he would pay tax on... can you please outline a tax avoidance scheme that would put an extra £50,000 in the pocket of someone with a business generating £100,000 in profit per year, if they're currently paying the highest amount of tax (PAYE)? What about £200,000, is it possible to turn £95,000 take home (on £200k as per my figures above) into £145,000 take home? He absolutely could avoid a lot of tax by keeping the money within his company, but that would not fit his story.

Just google 'offshore umbrella schemes' and look at the more 'adventurous' ones.

K2, for example, is the scheme that Jimmy Carr used.

EDIT: or Bestpay, since that's the one he actually uses! Don't be surprised if you don't find much information on the technicalities of how they work on their websites though - have a look for contractor forums, they will probably give you a better idea.

[Deleted User]

Mortgage_Mark wrote: »

Don't be surprised if you don't find much information on the technicalities of how they work on their websites though - have a look for contractor forums, they will probably give you a better idea.

Thank you for the pointer. I've read a number of threads on a number of forums (accountingweb, contractoruk) and the conclusion seems to be that while these schemes are "legal" HMRC take a very dim view of them and with new Accelerated Payment Notices anyone using such a scheme is setting themselves up for a huge pain in the future when HMRC catch up to them. From what I've read the most popular/respected provider (for "normal" people) is AML and even AML users are getting very nervous, and AML only guarantee 80% take home. I read that the majority of the providers of this service will just shut up shop and leave their users entirely responsible when HMRC catch on and that AML is an outlier in that they are fighting HMRC on behalf of their users, I read that any provider offering >80% is most likely one of the shady providers and "Approved by the QC" is a red flag, which coincidentally is what bestpay claim.

Anyway it looks like I was wrong, I don't entirely agree with the "legal" definition because from what I've read HMRC do eventually catch up to people that have used these schemes and make them repay all tax with interest (I assumed "legal" to mean: it's okay, nothing can go wrong) but I guess that's just me being pedantic, I also guess it's possible a large number of the forum posters were HMRC shills trying to scare others into stop using the schemes, but who knows! I certainly wouldn't risk it but maybe the OP is less risk averse Thank you for the information!

Also relevant to the original topic at hand, someone explicitly said in one forum post that people using these schemes should not expect positive results when looking for a contractors mortgage.

Roger_Mellie_2

nospaceforbaby wrote: »

the remaining revenue goes through bestpay at 90% return

HMRC will catch up with you. No doubt you'll appear on Contractor UK asking for help because "I've just received a letter from HMRC about an offshore dodgy scheme I used..."

Reads like you're under a lot of pressure from your 'missus' so you're cutting corners and taking on huge risks to please her.

Come clean, go Ltd. With a decent accountant you can retain a max of 75% earnings. There other things which can lessen the burden, but only if you do things correctly.

Roger_Mellie_2

Interesting conversation about Bestpay on contractor UK:

http://forums.contractoruk.com/accounting-legal/85639-anyone-heard-bestpay-alternative-ltd-company-2.html#post1809378

along with what HMRC have done in the past:

http://www.hmrc.gov.uk/news/contractor-loan-schemes.htm