Heads I win, tails you lose

KEY POINTS

• Reasons for setting up employee benefit trusts.
• Corporation tax or PAYE problem for HMRC?
• One tax charge will be due on funds in an EBT.
• Significant game changer will come in 2017.
• Options remaining for unresolved EBTs.

Last week’s Taxation carried an impassioned comment article by Graham Webber ‘Lifting the disguise’ (page 8) on the effect of the Budget proposals on disguised remuneration in the contractor market place. However the changes do have wider implications particularly as they affect employee benefit trusts (EBTs) and other similar structures such as employer-funded retirement benefits schemes. Unless otherwise specified references to EBTs in this article include other such arrangements.

Standing back

It is necessary first to contextualise the proposed changes.

Trusts and other...