PAY LESS TAX
TRADE WITH A UK INCORPORATED AB COMPANY AND STILL BE PROTECTED FROM IR35 AND SECTION 660A
Contractors want to be Self Employed, because then they pay less Tax.
To help maintain someone as Self Employed, they would set up their own Limited Company owned by them which made it harder for the Tax Office to suggest that the individual was in fact an employee.
However the Inland Revenue saw this as Tax Avoidance and closed this loophole.
Now if a Company has only one client at a time and, they or their family own the shares, or they receive renumeration that is not taxed under PAYE and in most cases of Self Employed Contractors that is the case, then the provisions of IR35 are triggered.
So take Example ( A ), with your own Personal Service Company , the Provisions of IR35 are now triggered.
But with Example ( B ), if you are employed by a Company the Provisions of IR35 do not apply.
So you need to look for the Circumstances of ( B ) combined with the previous financial benefits of ( A )
We therefore advise any individual who supply their labour by contract, to use and trade with a UK incorporated AB Company and nullify IR35.
An AB Company is one of which you are the Named Director but are employed to act as such, whilst performing in your chosen Discipline, and we are the named Shareholders.
You are employed by our American Company and Contracted to the AB Company. This is a tried and tested method having been operating since 1995 it has been examined by the Revenue without adverse reaction.This creates a situation whereby you as an employee, will pay deferred Tax on a declared salary of 40% of that Company’s earned income and receive 20% of that earned income as declared TAX FREE expenses wholly & necessarily incurred in connection with your Employers Business. The 12.5% which would be allocated as the Employers National Insurance Contributions are deducted from that earned income, but because the Company does not have a Business Address in the UK, it does not have to be paid and you would also receive that TAX FREE paid to you in gift form, salary sacrifice scheme or added to the end of contract payment. A payment representing 17.5% of that earned income would be paid to you at the end of each two year period of contract classed as Redundancy Payment which is also TAX FREE up to 30K. Our arrangement works, acceptable to the Revenue because we are outside the jurisdiction of the UK tax laws.
You account in full to the Revenue of the total income that you earn less, of course, of any amount which is company income.
We use six corporate bodies to achieve a low tax arrangement outside the Revenues control. We employ individuals through our American company which is not subject to US tax.
We use a 2nd American company to give you continuity of employment after receiving your tax free end of contract bonus payment from the 1st.
You receive tax free expenses approved by the Revenue.
Because of the nature of an offshore company the Employers National Insurance contributions are not paid also because you are paid a basic wage that is less than the tax threshold you pay no primary N.I but are credited as if you have, due to the introduction of the AB company acting as agent of which we are the shareholders, but do not receive any dividends.