Umbrella companies using growth share schemes Umbrella companies using growth share schemes
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  1. #1

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    Default Umbrella companies using growth share schemes

    Edit: Advice from the moderators. Do not get involved in a growth share scheme. They are bad things. To understand why, read the responses below this post.

    Hi Everyone

    I've scoured through the boards and can't find anything specific to this topic, apologies in advance if I have missed anything.

    I am looking for information on the use of growth share schemes used by umbrella companies to make use of capital gains allowance to reduce tax liability. I know if something seems to be to good to be true it usually is, but using growth shares is a legitimate practice and I'd like more info, so any information from those familiar would be welcomed.

    Info I have received from the provider is as follows;

    The growth share scheme involves paying taxes on 100% of your income and making a full declaration to HMRC through your self-assessment. You have the salary and your employer offers a Growth Share plan as an incentive the proceeds of which incur a CGT liability. There is no loan or advance in play.

    The contract of employment is mutually agreed with the Umbrella company and the salary can be set at a level you feel comfortable with, but must be at least £425.00 per week to comply with the minimum wage requirement. PAYE and NI are calculated and deducted from these figures and paid across to HMRC keeping you up to date with all statutory deductions.

    Once this part has been completed, the remaining amount is transferred into a Growth Share plan which is a method of employee benefit used by businesses throughout the UK.

    Growth Shares allow gains to be taxed as Capital in the hands of participants and are used as a tax efficient alternative to options, this also enables the use of an individuals £12,300.00 annual exemption, and the lower 10% and upper 20% rates of CGT.
    Last edited by Isuvu; 1st June 2020 at 12:21.

  2. #2

    Prof Cunning @ Oxford Uni

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    Anything containing the word "scheme" - avoid like the plague.
    Anything which takes a lot of explaining, but avoids the details - avoid like the plague.
    About the only thing missing from the description is "QC approved and HMRC compliant"

    Which "umbrella" is offering this?
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  3. #3

    Contractor Among Contractors

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    Any arrangement which means you pay less tax and/or NI than full PAYE is seriously asking for trouble.

    From painful personal experience, this is how it goes:

    1) for the first year or so everything seems fine and dandy
    2) a couple of years later HMRC starts opening enquiries into your tax returns
    3) before long the scheme provider shuts up shop, leaving you to face HMRC on your own
    4) you then endure many years of worry and uncertainty
    5) eventually you'll end up having to cough up the tax "saving" (plus years of interest added to the bill and potentially penalties)

    Do you fancy that?

  4. #4

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    Avoid. Or, if you need some proof, ask for written evidence of "The tax treatment is formally accepted and acknowledge by HMRC" and expect nothing.

  5. #5

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    Quote Originally Posted by Paralytic View Post
    Avoid. Or, if you need some proof, ask for written evidence of "The tax treatment is formally accepted and acknowledge by HMRC" and expect nothing.
    Growth Share Schemes are legitimate practice, they must be administered properly.

    https://w ww.osborneclarke.com/wp-co...-shares-v4.pdf

  6. #6

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    Quote Originally Posted by Paralytic View Post
    Avoid. Or, if you need some proof, ask for written evidence of "The tax treatment is formally accepted and acknowledge by HMRC" and expect nothing.
    Growth Share Options are legitimate, at least thats true!!

    http://https://www.osborneclarke.com/wp-content/uploads/2018/07/growth-shares-v4.pdf
    Last edited by Isuvu; 1st June 2020 at 11:59.

  7. #7

    Double Godlike!

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    Quote Originally Posted by Isuvu View Post
    Growth Share Options are legitimate are legit, at least thats true!!

    http://https://w ww.osborneclarke.co...-shares-v4.pdf
    Yeah, so are film investments and registering as car dealers and having access to red diesel - providing you do actually qualify for such treatments. EBTs are meant to improve the return on pension investments when paying them back to the investor, for example, not a way to process earned income...

    Don't be greedy. Pay the taxes you owe when you owe them. Ignore all the clever and totally fake people telling you different. It will be much cheaper in the long run.
    Blog? What blog...?

  8. #8

    Contractor Among Contractors

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    Quote Originally Posted by Isuvu View Post
    Growth Share Options are legitimate are legit, at least thats true!!

    http://https://www.osborneclarke.com/wp-content/uploads/2018/07/growth-shares-v4.pdf
    Give it a try, and come back here in a few years and tell us how it worked out.

    Just don't expect any sympathy if HMRC are on your back.

  9. #9

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    Quote Originally Posted by DealorNoDeal View Post
    Give it a try, and come back here in a few years and tell us how it worked out.

    Just don't expect any sympathy if HMRC are on your back.

    Whooaahhh..easy tiger, I didn't for one second say I was, I merely stated that growth shares are legit which they are, I was looking from some input from the board as I've never come across this particular option before!! No need to bite!!

  10. #10

    Double Godlike!

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    Quote Originally Posted by Isuvu View Post
    Whooaahhh..easy tiger, I didn't for one second say I was, I merely stated that growth shares are legit which they are, I was looking from some input from the board as I've never come across this particular option before!! No need to bite!!
    Sorry but there is every reason to bite. Even considering using such schemes - any scheme, not just this one - is an act of gross stupidity so we try to warn people off them as clearly as we can.

    But hey, your money, your life, your 15 years tax investigation.
    Blog? What blog...?

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