Contractor Umbrella Company
Danbro’s View on Offshore Umbrella Companies
New legislation has highlighted the potential risks, which could include massive back tax bills, for contractors using offshore umbrella companies, say Danbro.
Offshore umbrellas based overseas – including the Isle of Man – have offered contractors up to 85 per cent of their income by operating from locations outside the UK tax system.
However, t he Finance Act 2008 introduced measures to prevent tax avoidance through misuse of double taxation treaties for income arising on or after 12 March 2008.
It also introduce d legislation that retrospectively cancels the effects of a scheme popular with contractors in which they set up trusts in tax havens, funded with income derived from the UK, receiving payments tax- free due to the relevant double taxation treaty.
Tax could, in theory, be pursued as far back as 1987, with the potential of hefty tax bills. Penalties of up to 100 per cent of the tax due can also be levied for non-payment by HM Revenue & Customs (HMRC).
Elsewhere, the UK and the Isle of Man have signed a new tax information exchange agreement on 29 September – which will come into force once both governments introduce the legislation necessary – which will allow the UK to enforce domestic tax laws by obtaining information from the Isle of Man on tax issues.
Damian Broughton, Danbro managing director, said: “By using a UK-based specialist in contractor accounting, like Danbro, which is audited, regulated and has received a 100 per cent compliance visit result from HM RC, contractors can have complete confidence that they will be fully compliant with UK tax laws while operating in the business structure that best suits them, with their earnings maximised and administration minimised.”
Find out more at News, DANBRO – Umbrella Company
About the Author
Danbro are an Umbrella Company providing accounting services to thousands of Contractors and temporary workers throughout the UK.
As accountants for contractors we aim to:
MAXIMISE YOUR NET EARNINGS
MINIMISE ADMINISTRATION
GIVE YOU TOTAL PEACE OF MIND
Whether you choose to run your own Limited Company where prices start at just £80 + vat or wish to work through a Danbro Umbrella Company for only £20 p/w, we can help you to work out which accounting option works best for you.
For more information contact Danbro at
Head Office on 01253 600140
Danbro London Office on 0207 836 8400
Visit Danbro
As a new I.T contractor, should I set up my own company OR join an ‘umbrella’ company ?
Are you an I.T. contractor? Can you explain whether you think setting up your own company or working under an ‘umbrella’ company is best?
What is the name/website of a good ‘umbrella’ company that you personally have used and what are it’s advantages?
Are you an accountant? What thoughts do you have on this matter ?
[for information only, examples of umbrella companies are atlantic-umbrella.com, psccs.com, bbuffalo.com etc.)
Thanks in advance !
Following this years budget speech, umbrella companies are being targeted by the Revenue as anti-avoidance. The issue is: are you going to be providing services to one firm only. ie are you really an employee of that firm, regardless of the fact that your personal company receives payment for your services. Type IR35 into the Revenue’s search engine and all will be explained.
If you will be providing services to more than one firm, it is really up to you, but you will have more independence if you set up your own company.
Tax advice for Contractors Umbrella Company Tax Advice
In by gone days all a contractor had to do was give the customer good quality and good service and he/she would be set. Then set back and let your customers do your selling for you. They would tell a friend and then that friend would tell a friend. Your phone would be ringing off the hook. I remember as an Architectural designer some days I would have up to four people wanting to schedule appointments for designs. Those days are long gone! But Fear Not! Click Here For Help
