Composite Companies ("Umbrellas Companies")

In earlier years, these were initially set up as a way of avoiding your taxation
responsibilities in the UK.   Now you will find a mix of reputable and non-reputable
types of these operators in London - so check the fine print carefully if you decide
to go with this option!

Essentially, a contractor would be a shareholder of a company, as opposed to being a
'Director' and as such would have no control over the operating of a company and therefore
not be held liable if audited by the Inland Revenue.  Some of the more reputable of these
operators will show how you pay relevant tax required, but in a way that minimises your tax
payments - ie: paying the minimum amount of tax required, but paying it nonetheless.  
Providing you can show evidence of tax payments if you are audited by the IRD, you
will remain within the legal requirements of UK tax law - show no proof, and you can be
charged with tax evasion.

IRD and the Government takes a dim view of those companies, their directors and shareholders,
that show no evidence of having met and paid their legal tax payment requirements, and make it
clear that they regard these types of Composite Companies as illegal.  Tax evasion is a criminal
offence, whichever way you dress it up - and you will be prosecuted if proved to be shown to avoid
paying tax.

Aside from this, many of these operators charge a percentage of your wage to cover their 'risk' -
which reduces it's appeal when you are looking for the best avenues for managing your income.  
Our advice?  Avoiding your tax obligations is not a game - to try and do so is risking prosecution.

Advice?  Read the fine print and always get a second opinion - remember that the only person
with your best interests at heart is yourself!

Paying into Off-Shore Accounts

Not a lot to be said about this option either.  Let's just say that IRD and the UK
Government are aware of these institutions and are not turning a blind eye.  Many
people use these companies as a smoke screen tactic to avoid their taxation
obligations.  Supposedly the onus is on you to pay your taxes, NOT the offshore
institutions you're invoices get paid through - they just charge a minimal
percentage of your earnings for using their 'service'.  The IRD are
currently investigating many of these islands and will prosecute
if you are found to be negligent or fraudulent in your dealings.

NOTE: the IRD of the UK now has offices based in South
Africa, Australia and New Zealand.