Isle of Man Umbrella Companies
Isle of Man Umbrella Companies appear to be on the rise. Strictly speaking, these Companies are not Umbrella Companies as such but as there is no real common term used for them we will continue to refer to them as such. That’s how contractors tend to refer to them. So, what differentiates them from onshore PAYE Umbrella Companies. Firstly their contractors are not paid by the Isle of Man umbrella companies. They receive loans from them. This is all completely legal. Using offshore schemes have traditionally been used by the rich and famous such as David Cameron’s dad Ian and his father-in-law Lord Astor. The Conservative Party’s major donor Lord Ashcroft is another.
So why is it the Isle of Man that these companies go to? The Isle of Man has its own Government. It creates its own laws. It has made laws which allow companies to shelter there for tax purposes. It is quite entitled to do so. It is a free state. It can make whatever laws it wants to. It is completely legal. Every so often the UK Government stamps its foot and demands changes. The Isle of Man authorities work with them to change the rules. For instance the UK Government is going to outlaw Employee Benefit Trusts. However, this will only be where it can be shown that the contractor is really an employee. HMRC must show that he or she is receiving wages rather than loans. They have to prove there is an employment contract.
However, Isle of Man Umbrella Companies owners are nimble on their feet. Most Isle of them have got out of Employee Benefit Trusts ages ago. They have set up other schemes which are completely legal. They are always one step ahead of the UK Government and taxman.
For a selection of good Umbrella Companies check out Which Umbrella Company