What are the risks?
The participants of EBTs that have been highlighted in many reports, tend to have gone into the schemes in good faith, often as a result of very aggressive and glossy marketing and have been left with little support when challenged by HMRC, a large legal bill, and the prospect of a large tax bill hangs over them.
For an oil and gas contractor earning the industry average day rate of £540, and operating under an EBT scheme, an HMRC claim for tax avoidance, over a ten year period, would amount to almost £150,000 – add penalties at the same rate as Rangers FC and you would be looking at £225,000 (which you would have to foot the bill for)!
As mentioned in last week’s blog this is a hot topic for HMRC who have upped their game in their battle with offshore tax planners who market such tax schemes to contractors.
The future for EBTs
EBT schemes are no longer effective as a tax planning vehicle from December 2010 as legislation was effective from then, with HMRC arguing that many were never effective, but tax evasion.
Schemes may well be promoted in the future, and it is probable they will have a QCï¿½s opinion and the provider will tend to be evasive about disclosing information to you about it. What you can be certain about is HMRC will target schemes that consider to be scams and it will be YOU the client of the scheme who is left with the tax investigation.
Our advice to you is that as soon as you think you may have cash flow problems, speak to your accountant. We are trained in how to deal with these situations and can you through the maze – contact us for more information.
Self Assessment – Q & A
Self-assessments. We have all heard of them, you maybe even know what they are. However, here at QAccounting some of our most frequently asked questions are about self-assessments. So below we have outline some of the most common questions we get asked, and the answers we get so tired of giving… just kidding.
Setting Up a Limited Company – 5 Key Things to Consider
If you are looking at going self-employed, then setting up as a Limited Company (LTD) may be the best option for you.
The Benefits of Having an Online Accountant
Here at QAccounting we are part of one of the UK’s largest contractor service providers. We started operating over a decade ago (around the same time DFS started their first sale) and have been dedicated to serving self-employed professionals ever since. One of the perks of choosing and accountant like QAccounting is that we offer all of our accounting services online.