Fiduciary Advance and IR35

[Carter]

Just starting a contract that's inside IR35, (public sector) and been advised by the agency that I need to contract through an Umbrella Company. Previously always been outside IR35 and gone via my own PSC.

I'm been approached by an Umbrella company that has said that via an agreement with a Trust, it will allow me to receive funds by way of a Fiduciary Advance which is non taxable.

The advice is that I "will become an employee of the preferred Umbrella Company. As an employee, IR35 just isn't applicable so this is something you needn't worry about.
They will pay you a salary and pay all Tax and NIC's due on your behalf. "

With this in mind I can take home about 84% instead of approx 60%.

This is all new to me. Anyone else done this and is it legit???

[SueEllen]

Run for the hills!

[TheFaQQer]

Anyone else done this and is it legit???

Yes (see the HMRC Scheme Enquiries forum), and no (see the HMRC Scheme Enquiries forum).

If everyone could legitimately take home 84% then everyone would do it (and HMG would then legislate to stop that happening). We don't for a reason.

[BrilloPad]

http://forums.contractoruk.com/hmrc-...following.html

[ASB]

Legit? Well that depends on your definition. It is almost certainly structured to conform to legislation and the relevant trust law.

The chances of it being effective are good. Until an enquiry starts. Then if you are really lucky the downside is only the "saving". The reality is the downside could very easily be a lot worse.

[northernladuk]

Who is it?

I don't know which is the biggest disgrace. The fact these schemes are still running or that the agents are pushing people towards them.

I'm making an assumption this is the case for the OP but I do know agencies still have people like this on their PSL so a general comment.

[WalterWhite]

Who is it?

I don't know which is the biggest disgrace. The fact these schemes are still running or that the agents are pushing people towards them.

How did they get in touch with you? Did they call you or were they recommended by your agency?

[BrilloPad]

Who is it?

I don't know which is the biggest disgrace. The fact these schemes are still running or that the agents are pushing people towards them.

I don't think its the agency in this case. From the OP: -

been advised by the agency that I need to contract through an Umbrella Company.
I'm been approached by an Umbrella company that has said that.

I would like the FCA to go after Umbrellas like that in the same way they go after Pyramid schemes.

[northernladuk]

I don't think its the agency in this case. From the OP: -

Yeah saw that but how did the umbrella suddenly know to approach him?

[eek]

Yeah saw that but how did the umbrella suddenly know to approach him?

There is a website comparetheumbrella that pretends to be a umbrella comparison site but is actually a front / lead generator for a tax avoidance scheme.

Edit top link here http://forums.contractoruk.com/accou...ml#post2386355