Loans from EBTs and other Trusts

[LisaContractorUmbrella]

[QUOTE=geoff from contracta IOM;1528271]

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 ?

OK strike judge and replace with tax tribunal; you don't have to have broken any laws just be suspected of avoidance by our friends at HMR&C. You would then have to defend the mechanics of the scheme and prove that it was a sham arrangement used purely to avoid tax

[BlasterBates]

Yes all these constructs Umbrella/Ltd to save tax have risks, and HMRC are constantly challenging contractors. Kate Cotterel spelt it out, HMRC are winning cases in the court.

The difference between being challenged in IR35 or expenses is that the risk is far less, you can insure yourself against IR35, and lets face it if you get challenged for some expenses it's not likely going to be more than a few grand.

You can't insure yourself against a challenge on EBT and if you lose, you're ruined.

It's not a matter of something being legal/illegal it's all legal, it's a civil matter between you and the HMRC about how much tax you should be paying.

[geoff from contracta IOM]

[QUOTE=LisaContractorUmbrella;1528321]

OK strike judge and replace with tax tribunal; you don't have to have broken any laws just be suspected of avoidance by our friends at HMR&C. THEY would then have to attack the mechanics of the scheme and prove that it was a sham arrangement used purely to avoid tax

[BlasterBates]

[QUOTE=geoff from contracta IOM;1528387]

THEY would then have to attack the mechanics of the scheme and prove that it was a sham arrangement used purely to avoid tax

They don't have to go to court, they just send you a closure notice with a huge bill. You have to take them to court.

It's HMRC that determines your tax bill. You can dispute it, but it might take several years.

[LisaContractorUmbrella]

[QUOTE=geoff from contracta IOM;1528387]

In your dreams

[geoff from contracta IOM]

I know we have had a lot of post backwards and forwards today , the point I'm labouring to make does not apply just to schemes such as mine but to everyones tax affairs. Don't just accept what HMRC tell you is the truth, take the time to find out what the actual truth is , they have become very good recently a publishing a lot of unsubstantiated rethoric and passing it off as law.
If taxpayers don't force HMRC to row back to the letter of the law the consequences are unthinkable as to the power they will command over peoples lives.
I have said before the law is the law is the law and both teams have to play within the rules. They might not like it sometimes and we don't like it sometimes but with a few notable exceptions the principle of equity should always win through.

[LisaContractorUmbrella]

I know we have had a lot of post backwards and forwards today , the point I'm labouring to make does not apply just to schemes such as mine but to everyones tax affairs. Don't just accept what HMRC tell you is the truth, take the time to find out what the actual truth is , they have become very good recently a publishing a lot of unsubstantiated rethoric and passing it off as law.
If taxpayers don't force HMRC to row back to the letter of the law the consequences are unthinkable as to the power they will command over peoples lives.
I have said before the law is the law is the law and both teams have to play within the rules. They might not like it sometimes and we don't like it sometimes but with a few notable exceptions the principle of equity should always win through.

I agree with you Geoff - this is exactly how it should all work but how do you propose that the taxpayer forces HMR&C to work to the letter of the law.

[BlasterBates]

Anyone thinking about these schemes should get advice from a reputable accountant:

[geoff from contracta IOM]

Anyone thinking about these schemes should get advice from a reputable accountant:

EBT's have not worked since December 9th 2010, before that they worked perfectly well if they were correctly constructed and this has been proven, can we move on please EBT's no longer work they did at the time and there is no point discussing them now .

I have yet to see an admission from any of the "doom sayers" about EBT's that they were absolutely and completely wrong when they claimed that they didn't work.

If they weren't right then why would people trust they're judgement now ?
It does demonstrate a fairly weak grasp of the subject matter and a lack of credibility to be so fundamentally wrong when all the evidence says otherwise.

[geoff from contracta IOM]

I agree with you Geoff - this is exactly how it should all work but how do you propose that the taxpayer forces HMR&C to work to the letter of the law.

You start by not blindly swallowing what they tell you and examine the facts ?