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TAXguide 16/18: EBTs and contractor loan schemes

In this TAXguide Rebecca Benneyworth answers questions raised in response to the Tax Faculty webinar on employee benefit trust (EBT) strategies and contractor loan schemes, which was broadcast on 8 August. Read a summary here, Tax Faculty members can download the full guide.

TAXguide 16/18

Tax Faculty members can download this guidance in full.

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The guide includes answers to more than 40 questions asked by webinar attendees on a range of issues. Examples of questions covered include:

  • Our client has entered into an employee benefit trust (EBT) strategy and now APN notices have been issued, should we pursue an HMRC review? Is this likely to be detrimental to any future settlement?
  • Can a client repay their loan then draw out the cash from the EBT and make a pension contribution with it, subject to annual allowance limits?
  • What is HMRC’s position on businesses which are affected but are no longer trading where they incur the additional historic PAYE, but the years are effectively closed for claiming the historic CT deduction?
  • If a shareholder/director receives a loan why would it be considered remuneration rather than a return on investment?
  • Can s223, ITEPA 2003 charges arise on non-director contractors and can the income tax paid by a company on behalf of a contractor be entered on a P11D?
  • What happens to the funds in the trust if the employee repays the loan? 
  • If a client goes down the route of repaying the loan before 5 April 2019, will he need to inform HMRC or obtain agreement with them?

Members of ICAEW and the Tax Faculty are able to watch a recording of the webinar in full.