Contract Working Query

[Jonty]

I'm currently a contractor working on a Ltd Company basis. Been sent through a scheme called a Partners Benefit Trust (run through Isle of Man), which reckons it can cut my tax bill to a flat rate of 18%, which would be a big saving on what I currently pay.

 

Does anybody know anything further on these schemes, or if they are legal - I'm aware that Employee Benefit Trusts were not regarded as being legitimate (infact I think thats the same problem Rangers find themselves in with HMRC at the moment!?) .

 

I've read through the speel and it talks about receiving payment as a loan from the trust; I'm struggling to understand this point in particular as if it is a loan then it surely has to be paid back, or if not and is written off would it not be regarded as a benefit in kind and be taxable?

 

(Apologies for the boring post!)

[K-9]

Pm RYYD. Believe he has helped folk on this in past.

[The Boofon]

I'm currently a contractor working on a Ltd Company basis. Been sent through a scheme called a Partners Benefit Trust (run through Isle of Man), which reckons it can cut my tax bill to a flat rate of 18%, which would be a big saving on what I currently pay.

 

Does anybody know anything further on these schemes, or if they are legal - I'm aware that Employee Benefit Trusts were not regarded as being legitimate (infact I think thats the same problem Rangers find themselves in with HMRC at the moment!?) .

 

I've read through the speel and it talks about receiving payment as a loan from the trust; I'm struggling to understand this point in particular as if it is a loan then it surely has to be paid back, or if not and is written off would it not be regarded as a benefit in kind and be taxable?

 

(Apologies for the boring post!)

 

I considered a similar scheme.

 

A managed service trust.

 

Your wages get paid to them, they pay you 500 quid a month and keep the rest in their account. They then loan you the rest as an interest free loan and at the end of the year you pay it back with the money in their account.

 

They take a 12% cut. In other words you lose 12% of your wage which is better than paying tax. Worked with a few guys who use it but I'm not 100% convinced about it. It's all above board for the moment but if you were looked into you'd have Hector and his tax cronies after you for the rest of your life.

 

Better to keep it at least half honest with these cunts in my opinion.

[BrianFaePerth]

It's all so complex nowadays.

 

Afore they Labour cunts came in wi IR35, it was simple and wi a wee bit of help fae a bank account in Jersey or the like, tax was totally optional