Reply to: EBT - Employee Benefit Trust

[NotAllThere]

It's called greed.

See, that's just bollocks

Not entirely. It's certainly the greed of the agency and scheme provider.

[Fred Bloggs]

See, that's just bollocks. I personally know two people, who, on being made redundant, applied for jobs only to be contacted by agents about contracts (a subject they knew lass than nothing about). Agent secured them contracts and basically just told them, to get paid you just have to sign this form with our preferred umbrella company. That umbrella company was Bedouin. As far as they were concerned, they were being advised by professional on a subject that they needed advice on.

I agree some people have been sold the idea on the basis of greed, but equally, a lot were sold it believing their advisor to be an expert in the subject.

There is truth in there of course and I am sure a minority of users would fit that description. Unfortunately, and this is where my sympathy stops, in the UK we run a self assessment tax system. A system where the individual is responsible for ensuring his income and tax is correct as per the lawful tax code of the country. Even if you use an expert adviser, it is still incumbent on the individual to ensure their tax is in order. And that is largely how the scheme promoters manage to get away with it. Not saying it is right, just how it is.

[malvolio]

Not 'mine' in this case as I never used anything other than a ltd co when contracting. The point is, people selling these things are seen by some people as 'professionals' and the type of people that should be reached out to for advice. To suggest that everyone who got involved did it through greed is frankly bollocks.

You might have only encountered people who are completely clued up about everything when they get into contracting for the first time, but not everyone is. Maybe stop being such a condescending prick though.

A condescending prick who was trying to point out the risks and general inadvisability of these schemes 12 years ago...

HTH. BIDI

[AtW]

You discuss your take home with other contractors ?

Given how high taxation is in this country it would not take a genius to realise something is not right if you suddely get 90% take home from the level where people paid 40% income tax. People who took part in it were not old senile pensioners who were taken advantage of by the scheme providers, had it been the case the scheme providers would have taken 40-50% of take home, but they only gone for 10% or around that level.

[TestMangler]

No, but the gap between your day rate and your net take home being rather less than your marginal tax rate should be a bit of a clue...

Not 'mine' in this case as I never used anything other than a ltd co when contracting. The point is, people selling these things are seen by some people as 'professionals' and the type of people that should be reached out to for advice. To suggest that everyone who got involved did it through greed is frankly bollocks.

You might have only encountered people who are completely clued up about everything when they get into contracting for the first time, but not everyone is. Maybe stop being such a condescending prick though.

[malvolio]

You discuss your take home with other contractors ?

No, but the gap between your day rate and your net take home being rather less than your marginal tax rate should be a bit of a clue...

[TestMangler]

Why are they not sueing those agents for negligence?

And they had no idea why take home was so high compared to other people in same contract?

You discuss your take home with other contractors ?

[SueEllen]

Every time I hear of a footballer being made bankrupt now I think HMRC.

[shaunbhoy]

I agree some people have been sold the idea on the basis of greed, but equally, a lot were sold it believing their advisor to be an expert in the subject.

[AtW]

Why are they not sueing those agents for negligence?

And they had no idea why take home was so high compared to other people in same contract?

[TestMangler]

It's called greed.

See, that's just bollocks. I personally know two people, who, on being made redundant, applied for jobs only to be contacted by agents about contracts (a subject they knew lass than nothing about). Agent secured them contracts and basically just told them, to get paid you just have to sign this form with our preferred umbrella company. That umbrella company was Bedouin. As far as they were concerned, they were being advised by professional on a subject that they needed advice on.

I agree some people have been sold the idea on the basis of greed, but equally, a lot were sold it believing their advisor to be an expert in the subject.

[SueEllen]

And yet people still fell for the snake oil salesmen's patter.

Makes you weep for the idiocy of hu-manity.

I wonder if Ollie heeded the advice to avoid the snake oil or if he's expecting a mammoth tax bill sometime soon.

I suppose we'll never know.

It's called greed.

[cojak]

Good advice given 31st July 2007 14:11

Mal was a soothsayer waaayyyyy before that.... http://forums.contractoruk.com/accou...html#post34485

OK, I'm convinced. I'm a neo-luddite of the first order. And anyway, my work isn't boring and I earn shedloads anyway. na-na-ni-nana

But...


Yes they can, sadly. As of the last budget, Dim Prawn made it possible for future tax legislation to be made retrospective to December 2004. So if they outlaw offshore EBTs at some point, they will be allowed to chase the back tax to that point. Another triumph of New Labour's disregard for common practice...

...2005!

[AtW]

There are a few loan-based schemes around, where the loan magically disappears every so often and you get a new one. Snag is, as soon as the loan is cancelled, you are liable for the tax on it as though it were earned income. Most of the sites promoting such schemes seem to forget to mention that bit.

Plus, of course, if you are UK tax resident, any income anywhere is taxable in the UK.

EBTs are illegal in the same way that MSCs are - if you use them, no problem as long as you pay full taxes, so not really much help.

The old rule applies - if it looks too good to be true, it probably is. Stick to umbrellas or your own company.

Good advice given 31st July 2007 14:11

[THEPUMA]

There are a few loan-based schemes around, where the loan magically disappears every so often and you get a new one. Snag is, as soon as the loan is cancelled, you are liable for the tax on it as though it were earned income. Most of the sites promoting such schemes seem to forget to mention that bit.

Plus, of course, if you are UK tax resident, any income anywhere is taxable in the UK.

EBTs are illegal in the same way that MSCs are - if you use them, no problem as long as you pay full taxes, so not really much help.

The old rule applies - if it looks too good to be true, it probably is. Stick to umbrellas or your own company.

I think the argument is that if the loan is written off after you cease to be an employee, it is not taxable. Alternatively, it could be left in place until you die, which helps minimise IHT, and then it gets written off after probate is granted.

Not something I am particularly keen on as the loans would always worry me but I'm not sure how HMRC would go about attacking them, without introducing restrospective legislation. I guess they would argue they haven't done that with BN66 as apparently they were just clarifying the existing legislation!