Newbie asking about EBT's

[geoff from contracta IOM]

Since the introduction of the DR legislation you can no longer be an employee and receive loans from a trust if you or your employer are connected with the funds.

[Old Greg]

Hi
I am in the same position. I have a 6 months contract to start. It may or may not get extended. Would I need an accountant to do this?
There is a contracting company in Isle of Mann who say they will pay me a basic salary based on minimum wage and then pay the rest as loan. I am wodering if this is the same concept.
Sorry if I sound naive.. but I want to make hay while the sun shines too.
Thank you in advance for the responses.

So when you pay back the loan, you are left with a minimum wage. Doesn't sound like a great deal to me.

[cojak]

As am I Lisa - I will watch this thread with interest...

Actually, I've decided that a 7 year-old thread isn't useful so I've split it.

And since the OP (now) is actually asking about tax evasion, I thought this would be better.

[LisaContractorUmbrella]

Hi
I am in the same position. I have a 6 months contract to start. It may or may not get extended. Would I need an accountant to do this?
There is a contracting company in Isle of Mann who say they will pay me a basic salary based on minimum wage and then pay the rest as loan. I am wodering if this is the same concept.
Sorry if I sound naive.. but I want to make hay while the sun shines too.
Thank you in advance for the responses.

As this thread has been resurrected after 7 years I am inclined to think However, if this is a genuine enquiry, I suggest that you read the thread at the top of this page - no to retro tax - campaign against section 58 - you will then be in a position to decide how much long term misery you are prepared to suffer for a short term gain

HTH

[pmg2012]

Hi
I am in the same position. I have a 6 months contract to start. It may or may not get extended. Would I need an accountant to do this?
There is a contracting company in Isle of Mann who say they will pay me a basic salary based on minimum wage and then pay the rest as loan. I am wodering if this is the same concept.
Sorry if I sound naive.. but I want to make hay while the sun shines too.
Thank you in advance for the responses.

If you're only going to contract for one year then form a limited company, draw the money you need out as a loan and then get the company struck off. You can ignore IR35 and s660 cause the Revenue will never get round to paying you a visit. That way you'll end up paying far less tax because of:

- the zero rate of CT up to £10k
- the availability of taper relief at 50% on striking-off (you & partner)
- the capital gains annual exemption (you & partner)

For example

Contract Income => £50k
Expenses => £6k
Profits => £44k
CT Payable => £8k
Capital distributions => £36k (figure above)
Cap Distribs (each) => £18k
Cap Distribs less CGT taper @ 50% => £9k
Capital Gain after Annual Exemption => £0k

TAX PAYABLE £8k or 16% of Gross IE Only 6% more than they'll charge for a post-Dextra case dodgy or what EBT