Share this content

contractor scheme - remuneration trust?

contractor scheme - remuneration trust?

Didn't find your answer?

Hi there more experienced members one of my potential clients emailed this to me - obviously he is tempted but to me it smacks of tax evasion 

Have you come across this and what do you think?

Monthly Invoice                                  £475.00/day x 21 days                          £9,975.00
Monthly Salary Deduction                                                                                 £1,052.57
Trust Contribution                              £9,975.00 - £1,052.57                            £8,922.43

You receive 83.00% of trust contributions and a Net PAYE salary.

Monthly Trust Remuneration                                                                          £7,405.62
Monthly Salary                                                                                                     £867.61*

Trust payments are made the same day that funds are received from your agency/client, and your Salary will paid on the final working day of the month.

The funds that are held in the remuneration trust are done so with you as the beneficiary, thus meaning that these funds can only be used to benefit you and can't be used for any other purpose. The trustees are bound by fiduciary law to do so and to use the funds in any other way would be in breach of said laws.
 

You will pay Tax and NIC's on the salary element, and you will receive 83% of the Trust Contribution. The 17% deduction covers administration costs, trust & fiduciary fees, on-going legal support and intellectual property charge. Therefore you will have no additional costs or fees to consider once you receive funds.

many thanks

Replies (2)

Please login or register to join the discussion.

By johngroganjga
22nd Mar 2013 11:07

Yes I have heard of such schemes.  They are at the most extreme end of aggressive tax avoidance.  I would always advise a client to go nowhere near such schemes.  However clients don't always take advice.

Thanks (1)
avatar
By vowlesj
25th Mar 2013 14:48

hmmmm...

The scheme you are referring to is probably based around an EBT.

EBTs work, but loans from them might not!  especially since the December 2010 hmrc announcements and budget 2011 changes.  Tread carefully and make sure that this is from a reputable tax planner with a barrister's opinion (dated after 5 April 2011!) and that the scheme includes tax fee protection insurance or similar.

A good question to ask yourself is, do you as a qualified accountant understand the mechanics of the tax planning?  

Thanks (0)
Share this content