Loans from EBTs and other Trusts

[Emigre]

Bugger. So all we actually needed to do was get everybody elected as an MP.

"These new rules relate to ‘disguised remuneration’. They are far-reaching and about as complicated as they could get."

In fact the new rules take up over 50 pages of the 300+ pages of the Finance Act. Amazing in an era of supposed tax simplification. The majority of the detail of the rules is frankly beyond understanding. Should lead to a nice array of tax cases based on interpretation and "intent".

Can't wait for the updated OED definition of "step" to be released.

[Mozart]

Just to restate the budget rules to close these schemes

It seems to have got lost in all the discussion, I cant find it so thought it would be easier to repost it
http://www.hmrc.gov.uk/budget-update...x/tiin2675.pdf

[Emigre]

EBT Settlement Offer

Thanks to Toocan for the following link...

HM Revenue & Customs: Employee Benefit trusts, settlement opportunity

This appears to be very much based on the 2011 Finance Bill which is awaiting Royal Assent. Without Royal Assent, normally granted in July, it does not have the force of law. However, an offer is an offer.

There is nothing extra in here that appears to address the self-employed situation.

Emigre

[DonkeyRhubarb]

There is nothing extra in here that appears to address the self-employed situation.

Emigre

What about this?

EBTs where there is no link with employment

In situations where HMRC consider there is no link to employment (anticipated to be a minority of cases):

* HMRC will deny a Corporation Tax deduction
* amounts will not be subject to PAYE and National Insurance contributions at the point HMRC deny the Corporation Tax deduction
* however, this will not prevent a subsequent tax charge under section 62 of ITEPA or new Part 7A from applying at some point in the future if a later taxable event happens
* if a subsequent tax charge does arise, provided one is due, a Corporation Tax deduction will be permitted at that time

[Emigre]

So DR are you suggesting that in fact the provider cannot claim payments to EBTs against Corporation Tax, thus potentially making the provider liable for the tax?

In terms of an IOM arrangement HMRC have no jurisdiction to deny CT deductions. That still doesn't mean that someone is employed and needs to pay PAYE/NI.

[DonkeyRhubarb]

So DR are you suggesting that in fact the provider cannot claim payments to EBTs against Corporation Tax, thus potentially making the provider liable for the tax?

In terms of an IOM arrangement HMRC have no jurisdiction to deny CT deductions. That still doesn't mean that someone is employed and needs to pay PAYE/NI.

I was just highlighting that, as far as I'm aware, this is the first time HMRC have mentioned the use of EBT schemes where there is no employment relationship.

All previous guidance has only talked about employer/employee.

[fspence]

Home Mr Cameron has left us alone

As a contractor who is working via an Umbrella Company / renumeration trust which returns 85% nett, I am hoping that HMRC continues to leave well alone and long may it last !

[ChimpMaster]

As a contractor who is working via an Umbrella Company / renumeration trust which returns 85% nett, I am hoping that HMRC continues to leave well alone and long may it last !

That's right, just keep your head in the sand and it'll all be OK.

[Fred Bloggs]

As a contractor who is working via an Umbrella Company / renumeration trust which returns 85% nett, I am hoping that HMRC continues to leave well alone and long may it last !

And your retention % is just a few per cent more than I manage under my own Ltd Co without the risk of an EBT.

[Morlock]

And your retention % is just a few per cent more than I manage under my own Ltd Co without the risk of an EBT.

Fred,
Presumably you are referring to the marginal rate of tax on your Company's turnover, and not counting the personal income tax on the dividends you're taking?