Has anyone else noticed the influx of new unqualified accounting firms targeting contractors? You might say, yeah, but so what? Well, read on, it’s not as benign as it sounds.
The new “pay up front” legislation
Some of these firms are offering tax avoidance schemes but they’re not being up front about it. If the website mentions “counsel’s opinion” or there’s mention of an eminent QC, or it just sounds too good to be true; it’s almost certainly a tax avoidance scheme.
You might say, “so what, it’s up to me what I do”…. and we couldn’t agree more.
However, what you might not be aware of is the new HMRC legislation coming in on 6th April 2014.
From that date, if you’re in a tax avoidance scheme, HMRC will give you 90 days to pay the tax saving, there is no option to appeal.
So let’s say that “unsuspecting contractor” meets “shady accounting provider”, (now, there’s a dangerous mix).
“Unsuspecting contractor” joins “shady firm”, pays over huge fees, (often 10% of the contract value). Later, HMRC becomes aware that “unsuspecting contractor” is using a tax avoidance scheme and raises assessments for many thousands of pounds. “Unsuspecting contractor” rings “shady firm” and is told, well if you look at our terms and conditions, you’ll see that we don’t actually guarantee the scheme……
So, like it says at the beginning of this article, caveat emptor – BUYER BEWARE!