Accountants for IR35 Contractors & Freelancers

“Offshore” arrangements for Contractors

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Recently, I came across an article entitled “offshore” arrangements for Contractors – should you be worried?

In the article the “you” as referred to is directed at recruitment agencies and thecontent of the article relates to recruitment agencies ensuring thatthey are “safe” with regards to the “Debt Transfer” rules with HMRCthat became effective January this year when “recommending” offshoreschemes to their contractors.

Thearticle suggests that some “offshore” scheme providers may not bedivulging the true nature and operational structure of their scheme andrecommendsthat recruitment agencies do not receive rewards either in money orgifts for referrals of clients to these schemes thus exposingthemselves to the risk of the debt transfer rules.

From theperspective of a freelancer of professional contractor, we cannotstress enough the importance of making yourself fully aware of the setup and operation of any such scheme that you are involved with orconsidering.

Remember:

The debt transfer rules were legislated to empower HMRC to seek redress for any unpaid debts from third parties.

However, in many cases you are the first port of call; on top of the list BEFORE any third party.

We recommend that you seek professional and or legal advice before using any “offshore” scheme. 

Ensure you are fully aware of all facts and that the scheme provider is fully compliant with all legislation.

Rememberthat in most of these schemes that we have seen the scheme providerearns their fees whether you, the tax payer, get into a prolonged taxinvestigation with HMRC, and whether you win or lose any investigation.You could perhaps ask yourself who will gain the most out of thearrangement, and who carries the risk of the arrangement not workingout as promised.