We all know that there are many companies claiming to offer you more take home pay than you would through a UK based PAYE Umbrella Company, however sometimes it may just be worth stopping for a moment to think! If you are considering looking into the best way to manage your tax affairs this year via tax planning, then ask yourself some of the following questions:
Tax Planning – Questions to ask yourself…
Does it sound too good to be true?
Are artificial or contrived arrangements are involved?
Does the scheme appear very complex given what you want to do?
Do they offer guaranteed returns with apparently no risk?
Are there secrecy or confidentiality agreements?
Are there any upfront fees are payable or the arrangement is on a no win/no fee basis?
Do they suggest that the scheme is vetted by a top lawyer or accountant but no details of their opinion are provided?
Is the scheme said to be approved by HMRC (it does not follow that this is true)?
Is taxation of income delayed or tax deductions accelerated?
Are the tax benefits disproportionate to the commercial activity?
Are offshore companies or trusts involved for no sound commercial reason?
Does the scheme involve professional trustees who claim to guarantee that the arrangements succeed?
Are there tax havens or banking secrecy country involved without any sound commercial reason?
Are there tax exempt entities, such as pension funds, involved inappropriately?
Do they contain exit arrangements designed to sidestep tax consequences?
Does your money seem to be going in a circle back to where it started?
Is there mention of low risk loans to be paid off by future earnings?
Does the scheme promoter lend the funding needed?
Is there a requirement to take out insurance against the failure of the tax planning to deliver the tax benefits?
We all know they seem attractive at the time, but you could end up in more trouble than it was worth. Find out more from contractors who have been “enticed” by some of these so called “tax planning” schemes.