Norla EBT Loan Scheme

[Friendly Accountant]

EBT schemes

The other danger when they have millions of pound outstanding is that they may simply recall the loans. You never know who will be managing this company in the future and whether they might get into financial difficulty.

If the company were to go into administration, the adminstrator, would almost certainly do this. As it is his duty to liquidate all assets and that would include all outstanding loans.

Beware!

If the scheme is properly set up, the loan should be between a trust and you. The trust is a separate legal entity to the company and the loan would not be an asset of the company. Therefore, the administrator would not be able to go after it. I have no idea how the Norla scheme is set up but it is worth checking.

[ChimpMaster]

If the scheme is properly set up, the loan should be between a trust and you. The trust is a separate legal entity to the company and the loan would not be an asset of the company. Therefore, the administrator would not be able to go after it. I have no idea how the Norla scheme is set up but it is worth checking.

I guess the words Employee Benefit Trust might be a clue

[mouse]

Either way, I think I might get out and go Limited to be on the safe side...

[Dilbert]

Contractor58,

Did you ever get a definitive answer on this?

I used Edge / Norla last year. I haven't received an HMRC letter (like Gizza did) but am nervous as to what might happen with that. I'm also starting a new contract soon and was going to go via the EBT route again but am having second thoughts now.

[cshylock]

I used Edge/ Norla during from june 05 to sept 06.
I have recieved 2 letters from HMRC telling me my employment with Norla consulting is under investigation for years 05/06 and 06/07.
In Sept 06 i changed emplyment to Norla services ( a normal Umbrella payrole) and i have stayed there since. (phew)
On my 07/08 S/A i made a loss and was due a refund ( partner in another business) BUT HMRC have frozen my file/account and will not refund a legitamite refund due to the previous investigations. Norla say they have never heard of this happening before ( bull ! ) and HMRC will not budge either.
I am trapped and dont know what to do. any advice?

[Waldorf]

Contractor58,

Did you ever get a definitive answer on this?

I used Edge / Norla last year. I haven't received an HMRC letter (like Gizza did) but am nervous as to what might happen with that. I'm also starting a new contract soon and was going to go via the EBT route again but am having second thoughts now.

I just do not get why people are still considering these dodgy schemes, it can only be greed, what sensible person earning good money, reasonanly expects to only pay a few percent in tax - smell the coffee!

[StellaFan]

what sensible person earning good money, reasonanly expects to only pay a few percent in tax - smell the coffee!

er most of them?

[Petestar1969]

Last year I used a scheme provided by Norla to pay myself. I’ve subsequently done the sensible thing and moved to a Limited company with SJD.

There were several similar schemes out there (don’t think they still exist) but brief background is you get paid in a loan that you never pay back (yeah, dodgy I know – but I was young and greedy). It worked out you retain about 87% of the amount you invoice your client.

Anyway the problem I now has is this interest free loan has appeared as a Benefit In Kind on my P11D. So I have to pay tax on the cash value of the loan this year. But as the plan is never to pay the loan back I assume I will have to treat this as a benefit in kind next year, the year after, the year after that etc etc until the day I die.

I’m only in my 20s so treating this as a benefit in kind for the rest of my lift could result in me paying everything I’ve earned in that period in tax eventually (depending on inflation, interest rates etc) …or I could even end up out of pocket for that work!!!

I thought I’d write this to
1. See if anyone had any advice? Am I correct this will have to go on every tax return for the rest of my life?
2. Warn everyone about schemes likes this
3. Give you all the chance to tell me what an idiot I’ve been

I heard that if the trust is offshore, ie in the Isle of Man, that you don't pay a benefit in kind because you're loans are from a tax haven. Maybe there's been a mistake by the guys you used.

[dezze]

I heard that if the trust is offshore, ie in the Isle of Man, that you don't pay a benefit in kind because you're loans are from a tax haven. Maybe there's been a mistake by the guys you used.

You only pay the BIK whilst you are employed by them. When you leave, you don't pay the BIK.

[shadaz]

Hi

I received notification from HMRC that I "Edge Consulting" (closely linked to Norla) are now being investigated "centrally". I know a few others that have received this too.

It's starting to stink to me.

Did you guys get any more information about EBT's and the Govt's ambition with them ?

So what happened to the investigation? Friends of mine have received the same letter from Montpelier. Although Montpelier did not use the loan scheme.