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Archive for the ‘Tax’ Category

Apr
25

Is Your Tax Status Self Employed Or Employed ?}

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Is Your Tax Status Self Employed or Employed ?

by

Peter Jones

How can one establish if you are Self employed or an employee for UK tax purposes.

There is no actual or legal definition of what employment or self-employment is and it is based on previous judgments which are commonly referred to as ‘case law’.

There are some key points to take into account in deciding the status of an individual for Income Tax purposes in the UK.

Self employed business traders have various key distinguishing pointers and that self employed persons are able to :-

Manage and operate their own business taking all the required key decisions.

Take full responsibility for the success or failure of their business.

Decide how, where and when they carry out their work.

Hire other persons to do the work that is required the cost of which is borne by them.

Provide the plant, equipment and motor vehicles that is used to carry out the work

They are free to take holidays and time off when they want to.

Usually have more than one client or customer at the same time. This is not always the case as some trades such as motor cycle courier are treated as self employed but may only be providng services for one courier service on a subcontract basis. I will explain this in more detail later in this article

People who are employees will usually:-

Work for one employer at a time and they (the employer) are in charge of the work that is done by the employee. They could how ever have two employments perhaps a day job and a week end job.

Are directed by their employer as to how to carry out their duties and as to when and where they perform your work.

Will be required to work a pre set amount of hours each and every week.

Will qualify for paid holidays but can only take these holidays in line with their terms of employment as regards their length and timing.

Will benefit from being remunerated at the same fixed amount depending on the hours that are actually worked, and get paid for working overtime.

Casual work or work of a part-time nature can still be classed as either employed or self-employed depending on the facts. The fact that a position may be either casual or part time has nothing to do with their employment status.

Self employed motor cycle courriers despite possiby only provding services for one courier company they are generaly treated as self employed because of how they work. They have no guarantee of work and are dependent on work being allocated to them. So if there is no work they do not get paid and then they must be classed as self employed. They supply their own Motor Cycles and pay for their own fuel and running costs.

It is,of course, possible to be both self-employed and in self employment simultaneously in that one could be working for an employer during the day and involved in running your own self employed business at the week ends or in the evenings.

Each contract either of service or of employment must be considered independently on its merits.

As mentioned it is possible that one could be both self-employed under a contract of service and be an employee under a contract or employment.

If you are not sure you should take professional independent advice from an Accountant or somebody who specialises in this. My experience is that if you go to the tax office they do not have much real knowledge and always tend to suggest that one is an amployee. That way they keep their jobs and collect more tax for the Govenrment.

Whether one is an employee or self-employed depends simply on the facts of the actual working arrangements and the terms and conditions contained in the contract as these factors all need to be considered at the same time.

If you are self employed then,of course,you will be responsible for your own tax and National Insurance contributions.

You will need to advise HM Revenue & Customs (HMRC) by registering with them within 3 months of commencing employment. It is possible to download a registration form from the HMRC web site or you can can register by making a call to the Newly Self-employed Helpline on 0845 915 4515 which is open 8.00 am to 8.00 pm Monday to Friday and 8.00 am to 5.00 pm Saturday and Sunday.

You will also need to file a Self Assessment tax return with in the required time limits and make payments as required for both National Insurance and Income Tax

If you are employed then the burden for actually deducting and paying your tax and National Insurance contributions will fall on your employer. This will be dealt with by under the PAYE (Pay As You Earn) system. With this tax system you need to ensure that you have been given the correct code number and are not on an emergency or week 1 basis.

If you are,then quite oftenly, you are taxed either on a week 1 code or on emergency tax which means that you will often be over taxed and usually will be due a tax refund at the end of the the tax year.

The Author writes many articles on Income Tax and for more information please go to

Paye Reclaims

Article Source:

eArticlesOnline.com

}

Nov
26

Insurance Captives Help Bailout This Economy.}

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Insurance Captives help bailout this economy.

by

ScottN

Interested in Insurance Captive

When a captive is established, most CEOS are interested in any potential tax consequences. Payment of premiums to a captive for insurance coverage may well be deductible as an ordinary business expense. But they may not be so deductible. If the tax consequences are important, then a lot of care should be taken along with engaging trusted, qualified advisers. Elsewhere the reader can find qualified and expert tax advice. My mission is to illuminate a few other points of consideration to support the opinions of the tax experts.

Risk Distribution

As to risk distribution, there are many more puzzling arguments. Some rulings have suggested that writing only one line of coverage in the insurer does not equate to risk distribution. This argument would seem to harm many traditional insurers who write only workers compensation or disability or boiler and machinery. This is an area for further refinement, i.e., more legal costs.

There have been some vague safe harbors, such as insuring more than 13 but less than 50 insureds. This has also been successfully overcome with skilled arguments and specific circumstances.

An approach that has had success is to have an outside insurance party conduct a review of the captive owner’s exposures and current coverage to determine if there are exposures peculiar to that business which are not addressed by the traditional market. This approach can be viewed as reasonable for businesses whose line of work isn’t well defined by the traditional insurers, such as some construction exposures and supply line issues.

Certain success are gained by reinsuring out of the captive more than 50 percent of the risk as measured by premiums. The choice of the reinsurer becomes critical as that can be viewed as not constituting “real” insurance.

Scott Wiseman has over 5 years of experience with the Insurance Captive business

Insurance Captives answersArticle Source: Insurance Captives help bailout this economy.

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Nov
25

Asset Protection Common Mistakes To Avoid}

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Asset Protection – Common Mistakes to Avoid

by

Roberto Bell

Asset Protection Mistakes Introduction- There are a lot of asset protection packages being offered out there today that are flawed. This will give you the sophisticated offshore investor an idea as to what to look for in your asset protection package.

Where are the assets located? – Our law firm constantly gets contacted by individuals from other countries (offshore to Panama) wanting to take a brick and mortar business in another country and shift the title of the business into the name of an offshore corporation or foundation. Wrong Tactic! This will not accomplish anything. Yes I know non-lawyers sell these packages to people all the time. Here is what is wrong. The offshore corporation, offshore LLC etc. will need to domesticate or register in the country where this business is since they are now actively operating in this country. This means the anonymity of the owners will be destroyed, the entity will need to register for taxes and pay them as well. If the offshore entity does not domesticate in the country where the business is the ownership will be flawed in that the corporate or foundation structure will not be valid in the country where the business is and the owners/operators will not get the protection of the corporation or foundation in that they would be personally exposed. Now if the offshore company owns a passive investment like a piece of land or non-income producing property this will be treated differently in most countries making this a workable strategy. This is viewed as an investment versus the offshore entity actually engaging in business which would be the case with a piece of income producing property like apartments or a business with employees and a physical place of business. Where the assets and if they are portable is key in asset protection.

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Offshore Bank Accounts – Some think this by itself is enough of an asset protection strategy. Wrong! The name on the personal account indicates the owner of the account loud and clear. When checks or wires are sent to that offshore account it leaves a trail right to the person whose name is on the account. Today the check clearing system and the wire transfer systems are monitored by the clearing banks, the correspondent or intermediary banks, the banking authorities in different countries and the various governments that are interested. All of these entities will have a record of the account and the person?s name. Forget privacy. When you use a Panama bearer Share Corporation it is like the old numbered Swiss bank accounts except instead of a number a name is being used. The owners of the Panama Corporations do not appear in any database or registry. When the wires and checks move through the system it can not be determined who the natural persons are behind the corporation or foundation (Panama Foundations are also just as anonymous). Don’t deceive yourself with a personal account in an offshore jurisdiction.

Bearer Share Corporations – The advantage of a bearer share corporation is that the ownership is based on who owns the stock certificates of the corporation. The owners are never recorded in any database or registry. The stock share certificates can be made out in blank and stored anywhere on planet earth. Well this is when it is done correctly like in Panama. The majority of other jurisdictions have ineffective bearer share corporations. The problem is the clients of these corporate agents who are not lawyers often do not explain things correctly or fully. Most jurisdictions require the bearer shares to be kept with the non-lawyer corporate agent in that country. The share must be made out to the owners and any and all changes of ownership must be through the corporate agent who records the new owner’s identities etc. The corporate agent of course must collect identity documents on the owners. In Panama the owner’s names may or may not appear on the share certificates, it is the client?s choice. The shares can be kept anywhere. The law firm must follow know your customer rules and get identity documents and references on the client but all that is attorney client privileged information that would only be released under a court order. If some civil attorney wanted to get into clients records to determine ownership we would need to be notified at the onset of the legal process and we would come out spitting and hissing to defend our client. We are a panama law firm and we will fight like a wildcat to protect our client’s privacy. Do you think a corporate agent who is not a lawyer is going to go out and spend $5,000 to $15,000 to defend the privacy of his client is he gets a civil subpoena? Do you think he might think it is easier and cheaper to just get another client versus spending thousands on a lawyer to defend any rights to privacy his client may or may not have? In Panama attorney client privilege is very strong.

Offshore Trusts – Most people do not know that a Trust is just a written agreement as to how assets are going to be handled. That is it. The superior asset protection vehicle is the Panama Private Interest Foundation. The foundation is a judicial person just like a corporation. The foundation has its own assets and liabilities just like a corporation. This is not the case with a trust. Foundations have protectors and beneficiaries, something like a trust. Foundations have no owners at all. There are no shares or stock certificates, no one owns a foundation. Foundations are anonymous. Foundations can own bearer share corporations and thus remove the ownership from the person forming the asset protection structure. Since a foundation is owned by no one he has the asset protection advantages of being an owner of nothing. He could be the protector of the foundation and he could be a beneficiary of the foundation, his choice entirely. The corporation could hire the person as an employee requiring him to do the investment management activities as thus he is required to be the signatory on the bank account. He can get compensated, get expenses, get medical benefits etc. All the while he owns nothing and the whole structure is dead anonymous. Try that with a trust. Trusts in offshore jurisdictions are generally not very anonymous requiring identity documents to be kept in the jurisdiction of the trust. This is vulnerability especially if these documents are not in the hands of a lawyer. While these offshore jurisdictions have laws to protect privacy a civil lawsuit can get a lawyer into court with reasons why the trust should be busted open, identity wise at first. A non-lawyer will be hard pressed to go out and spend $10,000 to defend his trust client. So just because it is a trust and offshore do not think it is so safe. The Panama Foundation is a far more secure asset protection vehicle than a trust, even an offshore trust. Panama Private Interest Foundations combined with Panama Anonymous Bearer Share Corporations can take you places no Trust would dare to go. Trusts are for the rich and foundations are for the very rich.

Tax Treaties – When there is a tax treaty there can be a fishing expedition conducted by a government to see if there is compliance. If there is no tax treaty with your country you run the risk of cooperation from a country that has a tax treaty with the jurisdiction you are using turning the information over to the other country. Tax treaties are vulnerability. Panama has no tax treaties with any country. Panama has dead anonymous corporations and foundations. Panama has excellent attorney client privilege. Panama has what is probably the world?s strongest bank secrecy. Panama has world class banks with billions of dollars of assets. You can not find any other country with this combination because it does not exist anywhere else.

MLAT – This stands for Mutual Legal Assistance Treaty. Countries sign these for assistance in prosecuting criminals. Panama is in one such treaty with the USA. Many of these so called offshore havens are in 15 or more of these MLAT treaties. The Panama treaty with the USA concerns serious crime like Terrorism, Narcotics, Money Laundering (real big time money laundering not paying off a $6,000 credit card bill), Extortion, Blackmail, Kidnapping and Fiduciary Fraud (like promoting a phony bank). It does not cover taxation offenses by themselves. Pay attention here carefully. Most all of the MLAT treaties use a principle of dual criminality. The offense must be a crime in both countries in order for the MLAT to be in effect. This is to protect citizens from being prosecuted for things like being a member of a certain race, religion etc that is being prosecuted like Hitler and the Jewish people. It also protects against sexual crimes that may be allowed in one country and not in another. Panama has no crimes regarding taxation. Any and all tax offenses in Panama are civil including tax evasion, failure to file, tax fraud etc. So forget about Panama cooperating on just a pure tax matter. This is not the case with most of the offshore jurisdictions. They have laws in the offshore jurisdiction criminalizing purely tax offenses and thus the MLAT treaties allow for the obtaining of information and eventual extradition for purely taxation matters.

Offshore Island Jurisdictions – Okay now you have your offshore tax haven asset protection structure set up on some island. Now just when you need to go online and wire out some funds there is a storm and the island has no electricity for two weeks which means no internet, no faxes and no phones. What are you going to do? One of the reasons the Panama Canal was built in Panama is because Panama has no hurricanes, no earthquakes (not in Panama City anyway), no tsunamis and no volcanoes.

Stability of Government – Panama is stable. It uses the USA dollar. Panama does not have a central bank like the Federal Reserve Bank that charges the country interest for the money this breaking the backs of the people with debt that mounts up over the years. Panama has no such debt. Panama could easily switch to the Euro. Panama has treaties with the USA to protect the Panama Canal. If the country was being threatened the USA would see the Panama Canal at risk and intervene with the military. This would take hours, not days. Compare the US Dollar with some of the currencies used in these tax haven countries.

Has Been Offshore Jurisdictions – many of the corporate agents out there offer structures from numerous jurisdictions, some as many as 20 different countries. This is their way of getting credibility. Their philosophy is to just sell the client something. They often sell asset protection structures from jurisdictions that were once good but over the years since 9/11 have weakened their laws and are now nothing more than a has been jurisdiction.

Corporate Agent Renewal Games – Many people new to offshore asset protection fail to ask what the fees for subsequent years will be for the structure. Many non-lawyer corporate agents feed on this and charge very high fees starting in year two because they can get away with it. Even worse they collect these fees and never pay the government where the formation is. They are not in the country where the formation is so what do they care. If you complained the island they operate on would probably not do anything about it or if they did the corporate agent would say the payment was not received. If you proved the payment was made then it would be a bookkeeping error and corrected. What they are hoping for is that the bank never asks you for a certificate of good standing and they can collect the money from you and pocket it for some years and then you just go away never even knowing your corporation was no longer in good standing. Generally a corporation can be brought back to life for seven years or so, depending on the country. If a lawyer did this serious penalties would result in any jurisdiction especially in Panama.

Smythe Bradley is an expat living in The Republic of Panama. He has published many articles on

offshore asset protection

in panama,

panama visas and residency

, as well as many other

expat issues

.

Article Source:

Asset Protection – Common Mistakes to Avoid

}

Jul
17

Donations Of Wheelchair Accessible Vans And Tax Deductions

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Donations of Wheelchair Accessible Vans and Tax Deductions

by

meganm

The Special Kids Fund is one of many non-profit organizations who dedicate their time and efforts to the welfare of kids with disabilities, special needs, and at-risk youth. Donations, particularly vehicle and wheelchair van donations, are just one of the many methods SKF uses to help support families, schools, hospitals, and programs for kids with special needs. The very dedicated people who are associated with The Special Kids Fund do their best to find ways to raise money, gather volunteers, and assist these programs in any way they can. However, their efforts alone often aren’t enough to maintain the expenses that are required to support the schools, hospitals, camps, programs, treatments, and individual care these children need. As a result, charity and donations are asked of the rest of the community to assist them in making their goals of helping disabled children, their families, and communities, possible.

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There are approximately 4 million children under the age of 18 in the United States who have some type of disability. Some of these disabilities leave children unable to walk without some support, like a walker or crutches, and others who rely on the use of a wheelchair because they cannot walk at all. Wheelchairs obviously have certain requirements that people who can walk tend to overlook. Wheelchair vans, are a significant help when it comes to transporting a person in a wheelchair. Accommodating a wheelchair in a typical vehicle isn’t easy, and the use of a wheelchair accessible vans allow these kids to be mobile, get to doctors appointments, and most importantly, to participate in other activities that their family and friends attend. There are some fortunate situations where an insurance company will cover at least a portion of the cost of a wheelchair accessible van, or the conversion of a van, enabling it to accommodate a wheelchair and lift. But most situations leave the cost of the van or conversion on the shoulders of the family alone. That is why vehicle donations and van donations are at the top of the most wanted list of SKF charitable contributions.

Many people have a van, SUV or RV that has been modified to be wheelchair accessible in order to accommodate their handicapped ore elderly family member and make transportation to the doctor, school, activities, and family trips easier on everyone. In the unfortunate event that your family experiences the loss of the family member who needed the wheelchair accessible van, or if circumstances simply change and you no longer need the van because you’re getting a new one, making a vehicle donation can be beneficial to both you and the recipient. You can use the donation as a way to commemorate the passing of your loved one, and give another family the opportunity to make their life a little less difficult by giving them the gift of transportation. Another way you can benefit from a vehicle donation is the year end tax deduction. Vehicles that are already adapted and are accepted into SKF’s vehicle donation program make the donor eligible for a full fair market value tax deduction.

In 2005, IRS Vehicle Donation Laws changed to only allow up to a $500 deduction based on the fair market value and requires that the owner determine its value based on its actual condition. Vehicle Donation Programs like SKF’S allow you to get the best IRS deduction since the donated wheelchair vehicle is a gift to a needy family rather than sold or auctioned. If the vehicle appraises over $5000, the IRS requires a certified appraisal, but this does allow you to get the highest deduction, even under the new IRS rules.

SKF and other non-profit organizations like them, whose mission and dedication to giving a better life to kids with special needs and their families is so important to our communities and their children who may be considerable restricted otherwise. By vehicle donations you become a part of their quest to improve the lives of those with special needs and the people responsible for caring for them. By making a vehicle donation, you become a part of the combined efforts that are already in place striving to help out one person or family at a time. Wheelchair vans allow families to spend time together as a family, to go out to dinner, family outings, on vacations, and even the simple everyday trips. Remember that your donations and charity not only benefit those on the receiving end, but you too, both in the form of tax deductions as well as a greater feeling of self-worth, knowing that you have made a dramatic difference in the lives of others.

If you would like to make a large donation this year that would benefit many kids and their families who have special needs,

Wheelchair Van Donations

are needed by many! Learn how you can get a

vehicle donation tax deduction

.

Article Source:

Donations of Wheelchair Accessible Vans and Tax Deductions