Employee Benefit Trust

I have pension assets in an EBT – What can be done with these?

Wed, 14 Dec 2011 11:12:39 +0000

A typical case that we can assist with involves an EBT with £50,000 – £1,000,000 in Employee Benefit Trust assets. Irrespective of whether the assets held are in cash deposits, property or shares, we are likely to be able to assist in their extraction from the EBT in a tax efficient manner.

The solution for these cases will be dependent upon personal circumstances such as:

Retirement planning intentions
The current trustees
The immediacy of access to the funds that is required

The range of options includes the use of an International Pension Contract (IPC), transfer of funds into a Remuneration Trust, or the purchase of shares by the EBT. The strategy is always going to be case dependent, however the outcome is always a realistic cost and a financially positive outcome for the beneficiaries concerned.

Why are Employee Benefit Trusts no longer available in the contractor payroll marketplace?

dickon — Thu, 30 Dec 2010 10:14:10 +0000

Legislation regarding Employee Benefit Trusts has changed with effect from the 9th December, and Employee Benefit Trusts are no longer a compliant way to achieve tax efficiency for a contractor or Ltd Company owner.
To quote HMRC:
‘Disguised Remuneration

As confirmed at the June Budget, the Government will introduce legislation to tackle arrangements involving trusts or other vehicles used to reward employees, which seek to avoid or defer the payment of income tax or National Insurance Contributions (NICs), including to provide a tax-advantaged alternative to saving beyond the annual and lifetime allowances available in a registered pension scheme.

A further announcement will be made shortly.’

This statement published in the week of the 6th December, was followed by a further announcement regarding an ‘anti-forestalling provision’ which in effect stated the intention of the inland revenue to apply the new (and as yet un-released and without parliamentary approval) legislation with effect from the 9th December. Using a neat bit of legislative time travel, the Inland Revenue has at a stroke, made the Employee Benefit Trust obsolete as a vehicle for contractors to improve their retention.

Who uses trusts?

dickon — Wed, 13 Oct 2010 12:52:26 +0000

Trusts are a widely-used and long-standing financial vehicle used for asset management and protection since well before the Victorian era. The power of the legal entity known as the trust has been long standing, John D Rockefeller understood this best with his widely quoted exortation to ‘control everything, own nothing’ and following his own advice placed all of his assets into a conglomerate of trusts. (He knew a thing or two about wealth management – Wikipedia states ‘Rockefeller’s net worth over the last decades of his life would easily place him as the wealthiest known person in recent history’.)

Our solution is legal, falls outside of the scope of MSC and IR35 legislation and we ensure that all tax deductions are taken as they fall due. We consider our product to be one of the most robust available in the marketplace which also produce some of the best retention rates.

We have contractors on site at many major employers including Credit Suisse, RBS, Morgan Stanley, the FSA, the BBC and the Financial Ombudsman. Many contractors are now choosing our solution, rather than using ‘umbrella’ companies, largely because the single-person and ‘expenses’ solution are no longer as tax efficient as they were – and are now coming under a greater level of scrutiny from HMRC.

You need a solution which is simple, compliant, robust in respect of any future legislative changes, and which gives your business a competitive advantage. Talk to us to learn how to move your business forward in 2011.

Do you partner with agencies?

dickon — Tue, 13 Jul 2010 12:52:57 +0000

There are many advantages to agencies of partnering with us. Contractor attraction, contractor retention and competitive advantage are three major ones. The solution is something that contractors want, we can help attract and retain the best candidates by giving higher net returns to those contractors, giving you a competitive advantage.

We believe that to only offer your contractors a choice of Umbrella Companies all offering the same product, is to offer no choice at all.

We are no stranger to the myriad of rules and regulations regarding compliance in the areas in which it operates. Should you have any specific concerns regarding any of these areas, we would be happy to offer whatever support you need to put your mind at rest regarding the full compliance of our solution.

5 Benefits of a ‘post EBT’ alternative Payroll Solution

Sun, 11 Jul 2010 14:10:49 +0000

You can keep more than 84% of your contract value

It is hard to talk about this benefit – simply because it is so clearly obvious why this is important! The take home net pay resulting from using an EBT is around an additional 20% for most contractors, which is the same as working for 5 days and being paid for 6, or to put it another way you could instead work for 40 weeks a year in place of 48. Where would you go with all that free time?

There are no expense claims to keep track of

Which contractor does not find expense claims to be a right royal pain? How much would you like to know that you would never need to waste time and energy dealing with this unwanted and un productive administrative overhead?

IR 35 does not figure in the picture

Rather than have to qualify as a contractor through avoidance of falling within the IR35 legislation, which is designed to ensure that contracting does not yield appreciably more take home pay than PAYE, you can also fall outside of all of this legislation and therefore not worry about ever being re-classified and hit with an unexpected tax bill.

There are no set up fees

Unlike previous high yield schemes, we can get you started with no up-front costs, you only pay fees upon use of our service.

Why isn’t everyone doing this?

Fri, 09 Jul 2010 14:31:27 +0000

It is only recently that an offering which takes advantage of the opportunities afforded by off shore tax schemes, has been developed and offered to the lower salaried contractor. Until recently these arrangements have been the privilege of the super rich, but now through the application of the same laws, efficiently processed and then offered to a more mainstream audience, it is possible for you to similarly benefit.

BN66 / Montpelier

dickon — Thu, 01 Jul 2010 13:03:57 +0000

The ruling in favour of HMRC in respect of the application of retrospective taxation per BN66 applies only to the tax avoidance scheme that made use of limited partnerships and the double taxation treaty between the Isle of Man and UK. The way is now clear for HMRC to pursue contractors who made use of that scheme for retrospective taxation. It is likely however (but as yet cannot be confirmed) that a case will now be taken before the European Court of Human Rights where the ruling may or may not be overturned. There is no precedent in the European Court in such a case and so the outcome cannot be determined. It is the case however that there is a clear contravention in human rights where law or legislation is changed or implemented after the fact, as in this case.

We do not make use of double taxation treaty arrangements, we do not and have not ever operated such a scheme.

Our arrangement is founded in the basics of English common law, this type of arrangement continues to be used by many high net worth individuals, in addition to the many contractors who are also able to use it.

Surely paying tax is of benefit to the country?

Thu, 23 Apr 2009 14:39:19 +0000

Did you know that it is against the American constitution for the Federal government to levy income tax? The founding fathers knew the possibilities of abuse afforded by such powerful tools. Of the income tax levied in the US, the expenditure is approximately as follows: One third is used to pay for the standing armies which protect ‘American interests’ abroad;

A similar amount is spent on the healthcare system, (which although may appear at first glance to be for the common good, is mainly being siphoned off to pharmaceutical interests);

Whilst the remainder is given to the owners of private banks who ‘create’ the dollars used as a national currency, in payment of interest deemed to have accrued upon money taken out on ‘loans’.

The situation is hardly any different in the United Kingdom, and represents neither a beneficial use of money nor an efficient one. If as we do, you sincerely wish to improve the world, we wholeheartedly support the principle of tything, whereby you spend the money yourself on worthy causes with the intention of assisting your fellow man.

What would you do with a 30% pay increase?

Fri, 17 Apr 2009 14:20:44 +0000

Do you wish to take advantage of the fall in property prices to upgrade your accommodation? Would you instead choose to:

Work fewer hours, perhaps taking that long planned around the world trip without sacrificing any of your hard earned luxuries?
Buy a share in a light aircraft and spend your free time souring free above the clouds?
Join a fractional ownership scheme for a yacht?
Pay off outstanding loans?

These are not mere idle day dreams. You really will have to decide what to do with your pay increase. Because it is guaranteed, you will know in advance exactly how much extra your take home pay will be each and every month, and can start thinking about what to do with it right now.