LLP Structure offering 80% return

[dddmira]

Hello

I was wondering if anybody has been contacted by any of the various tax consultancies offering LLP based structures that return 80% of contract value ?

As with any of these schemes there will be strings attached and how they compare with the EBT strings is anyones guess right now. It’s been suggested to me that the LLP structure has a shelf life of 2-3 years, which in turn suggests HMRC will shut it down with legislation that leaves the backdoor open for potential retrospective judgements, as happened with the EBT method.

However, I am intrigued by one particular consultancies solution that comes with a warranty that is underwritten by a third-party.
Let’s not read too much into it though – so far I have been provided with an example warranty letter I would receive were I to sign up. Trouble is the underwriter doesn’t directly assume the risk I am taking, they underwrite the risk the Consultancy takes. Were they to disappear in 5yrs time, would I have direct access to the underwriter who appear to be based on the Isle of Man ? I don’t think so ! Exact terms of the warranty aren’t as clear as I’d like either.

Now that the EBT route has been shut down, the LLP appears to be the new ‘QC Tax Council approved’ way forward. Sound familiar?
Has anybody else had any dealings with an umbrella provided LLP structure like this and what has been their experience so far?

Cheers

[SueEllen]

You can set up an LLP on your own if you have a partner who is also a contractor. Don't go near the anyone or scheme offering it as there is nothing stopping them running off with your money.

[SimonMac]

Go for it and report back to us how quickly you lost your money.

[craig1]

You can set up an LLP on your own if you have a partner who is also a contractor. Don't go near the anyone or scheme offering it as there is nothing stopping them running off with your money.

Agree with that entirely. Only ever go into a partnership with someone you trust implicitly or where you have dual signature controls over the bank accounts. Anyway, if you're a "partner" in a LLP and don't have control of the firm in some substantive way then this is going to hit you as a MSC. HMRC have made it very clear that LLPs can be MSCs just as much as Ltd Companies. If you fail any of the control tests then expect to be hit for a full PAYE and NI bill.

These schemes are just the latest incarnation of the EBT schemes and will eventually get the same treatment from HMRC. I wouldn't be surprised if HMRC seek to treat these as deliberate evasion schemes and go for the max penalty in future.