EBT & other loan schemes

[prozak]

I spoke with my scheme provider and they think the best way to handle it is to return the money to the agency and then for the contractor to raise a new invoice from another vehicle. Whether or not some schemes will be happy to return the money to the agency because "they are working on getting a new solution in place" is another matter.

Pastalista

That is interesting.

Gives me some confidence then that this is possible as long as my provider is up for it.

Provider is very busy at present so hopefully will come out in the wash when they have time to look at less high priority issues like this.

[malvolio]

That is interesting.

Gives me some confidence then that this is possible as long as my provider is up for it.

Provider is very busy at present so hopefully will come out in the wash when they have time to look at less high priority issues like this.

Oh do wake up... Hate to say it, but if you think paying you your own income is somehow not their highest priority, when that is what you are paying them to do, then you are sadly deluded and should go back to being a permie. Which bit of "it stopped on Dec 9th " did you not understand?

[prozak]

Oh do wake up... Hate to say it, but if you think paying you your own income is somehow not their highest priority, when that is what you are paying them to do, then you are sadly deluded and should go back to being a permie. Which bit of "it stopped on Dec 9th " did you not understand?

Facts are usually useful when people decide to make judgements.

You have none of the relevent facts for my situation and indeed seem to totally misunderstand my point.

[malvolio]

Facts are usually useful when people decide to make judgements.

You have none of the relevent facts for my situation and indeed seem to totally misunderstand my point.

The facts are that (a) any income you take from the scheme after Dec 9th will be treated as normal earned income at tax year end, (b) you will have to pay the necessary PAYE and NIC contributions by April 12th, (c) you joined the scheme to be paid a given amount regularly and your provider is "too busy" to worry about doing so and (d) you signed your income over to them (else the scheme wouldn't work at all) and they loan it back to you in some shape or form, so you may have problems getting the initial money back and using it another way.

How am I doing..?

Your point is that you may get your stake back untouched and start again. My point is you may be disappointed and even if you do you still face a big tax bill (as in "any payment from them after Dec 9th"). The other point is you need to get some other arrangement in place now, it will do no good to sit on your hands and hope for a miracle to occur. But hey, it's your money and your life. IDGAS if you won't listen.

[prozak]

The facts are that (a) any income you take from the scheme after Dec 9th will be treated as normal earned income at tax year end, (b) you will have to pay the necessary PAYE and NIC contributions by April 12th, (c) you joined the scheme to be paid a given amount regularly and your provider is "too busy" to worry about doing so and (d) you signed your income over to them (else the scheme wouldn't work at all) and they loan it back to you in some shape or form, so you may have problems getting the initial money back and using it another way.

How am I doing..?

Your point is that you may get your stake back untouched and start again. My point is you may be disappointed and even if you do you still face a big tax bill (as in "any payment from them after Dec 9th"). The other point is you need to get some other arrangement in place now, it will do no good to sit on your hands and hope for a miracle to occur. But hey, it's your money and your life. IDGAS if you won't listen.

a)incorrect not relevent to me.
b)incorrect not relevent to me
c)incorrect you do not understand what they are busy with.
d)correct but no longer relevent to me

How are you doing? - I'll give you half marks for point d). So 12.5%. Fail.

I left the scheme. And had my agency to retro-date my contract and stop all payments.

There is a small amount remaining - pre 9th December - that I did not draw down as a loan that is caught.

No major drama, but not worth drawing down and paying full paye/NI on just yet.

[malvolio]

a)incorrect not relevent to me.
b)incorrect not relevent to me
c)incorrect you do not understand what they are busy with.
d)correct but no longer relevent to me

How are you doing? - I'll give you half marks for point d). So 12.5%. Fail.

I left the scheme. And had my agency to retro-date my contract and stop all payments.

There is a small amount remaining - pre 9th December - that I did not draw down as a loan that is caught.

No major drama, but not worth drawing down and paying full paye/NI on just yet.

OK, fairy nuff, but to be clear I am correct even if it is not relevant to your particular situation. Perhaps you should explain thing more clearly up front: I got the impression you were still in the scheme and waiting to see what happened (like someone else earlier in the thread).

But come back in April and let us know what happened.

[prozak]

No prob.

Not one to hang around. I left as soon as news broke.

I believe most providers will have developed a new solution by now which probably makes a few of your other points slightly inaccurate also for people who stayed with a provider.

[pastalista]

Providers working on new solutions

No prob.

Not one to hang around. I left as soon as news broke.

I believe most providers will have developed a new solution by now which probably makes a few of your other points slightly inaccurate also for people who stayed with a provider.

Lots of providers seemed to be caught unawares by this announcement. I have a talked to a couple of them who are saying "we are finalising a new scheme that is even more beneficial from a tax saving perspective than EBT". They insist that they are just awaiting leading counsel opinion before opening the schemes up.

The schemes that they appear to be working on still seem to utilise trusts but not EBT - they also seem to be reliant on the end user now being a sole trader rather than an employee of the organisation as under the EBT schemes.

I am wondering if they are looking to use remuneration trusts rather than employee benefit trusts.

And so the wheel turns......

Pastalista

[malvolio]

I am wondering if they are looking to use remuneration trusts rather than employee benefit trusts.

And so the wheel turns......

Pastalista

Maybe so, but the new rules do not apply only to EBTs: they are potentially very wide ranging.

[pastalista]

Maybe so, but the new rules do not apply only to EBTs: they are potentially very wide ranging.

Indeed, but remuneration trusts are not classed as tax avoidance vehicles, are fully disclosed to Hector and don't involve (in fact specifically exclude) pension contributions. They are used for inheritance tax planning but can in fact be utilised for other things along the way.

They haven't ever been successfully challenged in court, which of course doesn't mean they won't be at some point.

Looking at the December 9th details, it is hard to see how they are caught by the change in legislation.

We will see I suppose.

Pastalista