Loans from EBTs and other Trusts

[jmo21]

GEOFF:
from your website:

The CBT Scheme is the first of its kind and the only current compliant solution that will enable you to retain up to 85% of your gross income.

Compliant according to whom?

If the majority of the "pay" is in the form of loans, how does the contractor know they will definetly get their money?

It can't be written into a contract, as that would (duh!) make it contractual?

How does your solution work?

[geoff from contracta IOM]

GEOFF:
from your website:



Compliant according to whom?

If the majority of the "pay" is in the form of loans, how does the contractor know they will definetly get their money?

It can't be written into a contract, as that would (duh!) make it contractual?

How does your solution work?

I thought we had done this already , re-read your earlier posts and you will find us discussing this. Let me know if you need a link

[BlasterBates]

[QUOTE=geoff from contracta IOM;1528200]

Sorry I can't get my head around this one, lets pretend all the parties involved except Willie The Painter (i've just made that name up for him) are recruitment agencies if that helps ?

We could say he was asked to paint a building which are the offices of a recruitment agency if you like ?

We could say that ABC Painting Contractors are really just a recruitment agency that supplies painters if you like ?

Has he become an employee yet ?

We could pretend that his wife is actually a recruitment agent but I still don't see us getting any closer to him being an employee.

You employ yourself and then award yourself loans via a third party. What is the difference between that and Rangers Football club.

Point is the contractor has a verbal contract with the agency. The agency pays the third party on the basis of the contractor's instructions.

Is the 3rd party an IT consulting company with experts who are working with the contractor to enable the contractor to get his work done, or is it just a company who specialises in offering loans, in which case it is acting in the same capacity as the 3rd party paying out loans to the Rangers Football club.

Remember the contractor does have a contract with the Agency, it just isn't written down, i.e. in the same way that Rangers Football club wrote down they pay 10,000 a month to the player, the agency agrees to pay 5000 a month to the contractor....verbally that is.

If you argue a judge wouldn't see it that way, can you point us to the text of the judgement which supports your view.

[geoff from contracta IOM]

[QUOTE=BlasterBates;1528226]

You employ yourself and then award yourself loans via a third party. What is the difference between that and Rangers Football club.

Point is the contractor has a verbal contract with the agency. The agency pays the third party on the basis of the contractor's instructions.

Is the 3rd party an IT consulting company with experts who are working with the contractor to enable the contractor to get his work done, or is it just a company who specialises in offering loans, in which case it is acting in the same capacity as the 3rd party paying out loans to the Rangers Football club.

Remember the contractor does have a contract with the Agency, it just isn't written down.

If you argue a judge wouldn't see it that way, can you point us to the text of the judgement which supports your view.

I think verbal contracts in the recruiment business have been fairly extensively covered on the forum

[BlasterBates]

[QUOTE=geoff from contracta IOM;1528241]

I think verbal contracts in the recruiment business have been fairly extensively covered on the forum

A verbal contract is legally binding.

All a judge has to do is ask whether the contractor agreed a contract with the agency and provide instructions to agree a contract with the tird party. Then the contractor has a choice either he tells the truth or he lies.

The trouble is a legitimate business reason for bringing a 3rd party in, eg it's too big for him, would sound very hollow if the 3rd party specialises in tax avoidance.

[geoff from contracta IOM]

[QUOTE=BlasterBates;1528254]

You're avoiding the issue.

A verbal contract is legally binding.

All a judge has to do is ask whether the contractor agreed a contract with the agency and provide instructions to agree a contract with the tird party. Then the contractor has a choice either he tells the truth or he lies.

The trouble is a legitimate business reason for bringing a 3rd party in, eg it's too big for him, would sound very hollow if the 3rd party specialises in tax avoidance.

Why does there have to be a legitimate reason ? What law is being tested here ? Why would a judge be asking, I keep asking why it is relevant and I have yet to hear an answer, so hows that for avoiding the issue.

Again why is it relevant ? What law are we or the contractors being accused of breaking that will ever see it in front of a judge ? How a contract comes into being does not invalidate the contracct except in very narrow circumstances so why does there need to be a reason for the third party arrangement to have taken place ?

Because they felt like it , hows that for a reason ? Again what law does this break ?
If your going to claim its artificial as I suspect you will then best tear up all contracts because umbrella companies are artifical arangements that reduce liability for agencies, as are contracts with contractors Ltd. Co's as contractors gain a tax advantage as are the contracts between agencies and client Co's because they transfer risk to the agencies. Where do you stop ?

[jmo21]

I thought we had done this already , re-read your earlier posts and you will find us discussing this. Let me know if you need a link

struggling with search in this thread, it only finds my last post

[geoff from contracta IOM]

struggling with search in this thread, it only finds my last post

I have replied to your email , I think it was in a different thread

[slogger]

Hi Geoff,
wont labour the point - but my worry was that the paper contract didnt reflect the reality of the situation..

e.g. offshore company says we'll pay you 85.6% of your invoices
paperwork says we'll pay basic salary - may be discretionary loans

now ianal - but my big worry was that the underlying/real arrangement didnt reflect the paperwork; if revenue challenge this then what happens?

possibly me being too cautious having been bitten by bn66 !!

[geoff from contracta IOM]

Hi Geoff,
wont labour the point - but my worry was that the paper contract didnt reflect the reality of the situation..

e.g. offshore company says we'll pay you 85.6% of your invoices
paperwork says we'll pay basic salary - may be discretionary loans

now ianal - but my big worry was that the underlying/real arrangement didnt reflect the paperwork; if revenue challenge this then what happens?

possibly me being too cautious having been bitten by bn66 !!

In our case we don't agree to pay anything other than a monthly retainer fee. Our real arangement and how it works in practice reflects the paperwork and we are quite meticulous in this as any of our consultants will testify.
Again I can't speak for other providers because I have my suspicions about a few making promises that invalidate the arrangements.