Tax

[jollygreen]

What's to stop me setting up a Ltd company in the UK, working through an agency in Eire and being paid to a bank in, say, the isle of man and writing cheques to myself without paying tax?

Apart from the ethics of course... ;-)

[Markandshez]

Its illegal.

This is not about who pays you what or where it comes from, the fact is that you are recieving income from somewhere and, therefore, must pay tax on it.


If the taxman believes you are using any tax avoidance methods that you have not asked to use, he can ignore them and tax you directly. If he believes you are using a Limited Company to get round any tax issues, he can ignore it and make you personally liable. IR35 i think it is.

[jollygreen]

Well yes, but apart from the legality of it, how would somebody get caught doinjg it?

I guess a Ltd company isn't even necessary, couldn't somebody work in one country, through an agency in one country and be paid in an offshore account? How then could the Inland Revenue trace "income"?

[Markandshez]

I believe the taxman has an amzing new piece of kit called a computer.

Why not just spend your time building the business and making money honestly instead of wasting your time trying to be a crook?

[jollygreen]

It's not really a business that can be grown (until I get an increase to my dayrate), I'm a contractor in the oil industry and just operate as a Ltd Co to minimise tax. But before I get ranted at by the liberalista, my annual tax is still more than the average UK INCOME so I don't feel guily at all.

And I'm not considering it but I know a guy who does as I described above - he's a contractor who works through an irish agency and gets paid in the Isle of man and I was trying to gauge what his chances are of getting caught....

[Markandshez]

the tax man has an initial 7 years to catch him. If however, they suspect fraud (which this plainly is) they can go back as far as they like.

Its only a matter of time.

And if you are a Ltd Company working with one contract and the business only employs a sole Director IR35 applies to you= The taxman cometh and they can ignore your Ltd company status and treat you as a Sole Trader

[jollygreen]

Actually, i think you'll find it depends on the wording of the contract with the client.

IR35 is not as simple as saying that if you are a Ltd Company working with one contract and the business only employs a sole Director IR35 applies to you.

I procide a service that my client cannot provide itself, I do not have anything in common with any employees of my client except that I sit in their office.

[jollygreen]

Do you work for the IR by any chance???!!!!

[miseryguts1]

The basic problem is that when you try to fiddle somebody might grass you up.

[abranei]

That method has been around for years and years!!!!

Since the tax man has been round for years and years I'd say he's already looking for people using this method. There's a trail for the tax man to look at

Tax evasion is illegal and the Customs and Excise/Inland Revenue has the power to come can take that lot including your house, car and seize you bank accounts.

[jollygreen]

Surely he can't seize bank accounts offshore though...?