It’s not surprising that there seems to be an upsurge in Contractors who want out of Umbrella Companies. Only yesterday we heard from someone who had been flogged a Scheme to take his pay out of the Umbrella Company as a loan resulting in a much reduced tax bill. He was assured by the Umbrella company that this was above board; of course they’d say that. They are trying to flog a service. He is now worried that HMRC will be after him for additional tax.
It’s amazing to think that there are Umbrella Companies out there still flogging these dodgy schemes. The fact that people are continuing to sign up to them with all the coverage in the Press also beggars belief. Why HMRC are not raiding the offices of these firms and closing the Schemes down is beyond me. When it comes to Schemes it’s a clear message of Caveat Emptor. The clue is in the title – Scheme!
Clearly anything with the word “Scheme” in it should be thoroughly and fully investigated, if not avoided, when it comes to keeping your tax affairs in order. Doing the appropriate due diligence after the event is of no use and certainly no defence when HMRC come after you for tax due.
But can you just change from an Umbrella Company to your own limited company?
As always with us accountants the answer is …… it depends.
A good starting point to find out if there will be any issues is to have your Contract and / or your Working Practices reviewed.
That doesn’t need to cost the earth.
In fact “Convert” is one such useful service from Larsen Howie which seems to do the job at a specially negotiated price of just £40.
If you’re thinking of pulling out of your Umbrella Company and setting up your own Limited Company then contacts Larsen Howie – CLICK HERE